This Biotech ETF Could Have Serious Implications For The Broad Market
InTheMoneyStocks.com | Jun 29, 2016 01:43PM ET
The iShares Index (ETF) (NASDAQ:IBB) has bounced beautifully off its double-bottom support at $240 on the daily chart. On thursday it traded as high as $255.74, just two days after hitting $240.
Investors are wondering if it's safe to buy $IBB.
The short answer is 'No', and here's why:
There is a major point of concern on IBB's daily chart. Notice the confirmed break down that took place when the IBB broke through its up-sloping trend line. Once confirmed, a retrace into that trend line -- like we saw Thursday -- is almost always a heavy shorting opportunity. That means the IBB may fall sharply as early as next week. If it falls hard, you can bet the market will also be dropping sharply. And that should be a major concern not only for biotech investors but for anyone involved in the stock market. Note the chart below.
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