Majority of indexes are red except biotech etf IBB and XBI. Biotech was making a base when market was pushing higher. Even QQQ was laggard in this move because of biotech stock bad performance in the stock market. After two month basing with W pattern bottom, Biotech etf seem to ready next move if market does not signal pull back.
Ibb etf is the one of the major Biotech etf widely followed by stock traders and investors because of its popularity and approximate performance of biotech sector. This ETF made a big move from 2009 to 2015. ETF price went up from $58 to $400 at its peak. However stock price went down from $338 to $240 in 2 month. That’s 29 percent price drop in 2 month. ETF came back from its low 240 to currently $270. ETF was making base while market was pushing upward leaded by S&P 500 index. Dow Jones index and S&P 500 both are close to its all-time high and recovered from all losses of January and February. IBB after one and half month base, ETF Seems to ready for its next upward move
From the ibb etf Chart, etf Closed today above its neckline today Even though daily chart looks like a shooting star candle Pattern. This happens because of overall weakness of the market. Most of the indexes are red today. However, IBB was successful to keeps its some of the gain. This shows ETF relative strength to the market. Another point is ETF is now upper band of the Bollinger band. This may induced some momentum traders and day traders to sell the stocks for the small time frame. But this pull back is nothing in compare to ETF overall potential to the next upward move. Even if ETF only came back to previous close, ETF has to move at least 20 percent of its current price, whereas Dow Jones index average yearly return is only 7.75 percent. That’s big move potential to the upside.
Another Popular biotech etf is xbi. XBI etf is biotech ETF of S&P 500 index. Today this ETF also showed its strength to the upside. Though ETF is still within the neckline range, ETF recent volume spike clearly shows Stock buyers interest to the ETF.
From the xbi chart, etf is trading with high volume and moving up higher with an upward trend and made a good base. xbi etf also has a big room to move up higher. XBI is still down 32 percent from 2015 close while s&P 500 index is up 1.09 percent from it last year close. xbi etf needs to move at least 33 percent to catch s&p 500 index move. Since stock moves up in sector wise, xbi etf and its components has a good chance start upward move as a part of Stock sector wise move. Both the etf charts of ibb and xbi signals that biotech etf could start its upward move at any point.