IBB Daily: 03/13/2014
On March 1st, I put up a chart of IBB in which I pointed how, during pull backs, IBB likes to visit its 50MA. Now, as of the close of trading on 3/13, IBB is within easy reach of the 50MA, which is also in the area of the .764 Fib retrace level. IBB is also moving within the confines of a Bull Flag pattern and has broken topside out of similar patterns in the past. Or is this a falling price channel which will take IBB lower? As long as IBB breaks topside out of this bull flag pattern before it reaches or takes out $233, then this is a bull flag. On the other hand, should IBB close below $233 before breaking topside, then this is a falling price channel. Since IBB hasn't re-visited a swing low in more than 2 years, it isn't likely to get to $233 before reversing; however, if IBB should take out $233 on a closing basis, then this is new behavior and one would expect other swing lows to fail as well.
Important things to watch in the next few days will be the reaction of IBB should it hit the 50MA and the CCI and the 14,3,3 Sto. The CCI is oversold now but it has become more so in the past so I would expect that to happen this time. The Sto is not quite oversold but could easily become so on Friday. When these get oversold, then IBB should bounce because that is what has happened in the past. If IBB does in fact bounce then it should clear the upper channel line of the bull flag formation and off it goes again, but if IBB gets oversold and does not bounce out of the Bull Flag, then this again would be new behavior and this would lead me to believe that IBB has more work to do on the downside.
IMHO, of course, and subject to change without notice. GL
Important things to watch in the next few days will be the reaction of IBB should it hit the 50MA and the CCI and the 14,3,3 Sto. The CCI is oversold now but it has become more so in the past so I would expect that to happen this time. The Sto is not quite oversold but could easily become so on Friday. When these get oversold, then IBB should bounce because that is what has happened in the past. If IBB does in fact bounce then it should clear the upper channel line of the bull flag formation and off it goes again, but if IBB gets oversold and does not bounce out of the Bull Flag, then this again would be new behavior and this would lead me to believe that IBB has more work to do on the downside.
IMHO, of course, and subject to change without notice. GL
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