Chart o’ the Day: Biotech Makes a Stand

From Stephen Suttmeier, chief technician at BAML, comes the below look at how biotechs are weathering the storm this week.

Looks like they’ve stopped falling, which is good. Suttmeier believes that a break higher, however, will be critical to prevent more damage – standing still may not be enough…

The NBI made a stand at 2400 yesterday.

The story is the same: The key for the NBI is holding this support (2436-2400) and then breaking above chart resistance and the 50-day moving average in the 2650-2655 area. A failure to do so in the days/weeks ahead would indicate that biotech is unable to respond to oversold conditions, which would be a bearish sign for the group.

Screen Shot 2014-03-28 at 10.46.59 AM

 

Source:

Testing supports on SPX, NDX, NASDAQ & NASDAQ Biotech
Bank of America Merrill Lynch – March 28th 2014 

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