Is the corrective bounce in biotech’s over now that we have completed the move into the SLOT resistance zone on the weekly chart?
IBB – Monthly Chart
In my CMG post yesterday, I showed how you can have a weekly chart bouncing higher while still maintaining the bigger monthly trend. As long as IBB remains underneath its ATR resistance level, then you should assume that the monthly trend will continue lower into a logical support zone.
That means eventually, the weekly chart’s bounce will find resistance and then roll-lower …
IBB – Weekly Chart
The bounce on the weekly chart has seen lots of overlapping candles … that typically is seen during corrective bounces. Price pushed right into the SLOT resistance zone and hit the 61.8% level that I really focus on when looking for support/resistance in the SLOT. Can we begin to head lower now??
IBB – Daily Chart
If the weekly bounce is complete, the daily chart will show the beginning of the move lower first … I think the break of ATR support and the broadening price pattern is a signal that the move lower has commenced.
Cheers … Leaf_West