Technical Analysis- Biotech (BBH)

By Yaser Anwar, CSC of Equity Investment Ideas

Let’s take a look at Biotech.

It’s clearly evident that the rising tide lifts all boats. In this case strength in market indexes has led to strength in BBH, but look at the volume! In technical analysis slang, we’re witnessing higher highs for the stock while volume is making somewhat higher lows.

In the below chart look at the first box with the blue arrow. Do you see the increase in volume when BBH sells of? Similarly, do you see the rise in volume vs. average when the stock rises back for the next two weeks? Now compare that with the volume since the April rise, almost non-existent.

Also, the circle on top shows that a bearish engulfing pattern is forming. If it breaks back below 188, where it dropped of from Feb 27th, could retrace to the 62% level in the third chart.

Ever since the March mid-week high volume pop, we haven’t seen a similar volume rise for a gain which is 2x that of the 3rd and 4th March weeks.

This is my favorite chart of ’em all. Do you see the trading signals one could have had? Will you be left saying ‘coulda woulda shoulda’ this time or will you jump the gun and take the red arrow signal? (look at the falling volume from Oct 06 to present)

Two posts today! Wicked, like the NBA slogan, "I love this game!"

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