Does this, alone, mean that Biotech has reached its peak for the year? To look further into that question, I present the following three Daily charts:
- Nasdaq 100 Index ($NDX)
- Nasdaq Biotech ETF (IBB)
- IBB:$NDX Ratio
Secondly, price action on IBB has been very whippy since it hit its all-time of 374.97 on March 20th and is trading in a range that is sitting above a 200% external Fibonacci Retracement level (which currently forms major support at 341.64). We may see a final thrust of price up to retest its all-time high to form a double top (and sloppy triple top) before it, once again, runs into major resistance at the top of its channel. We could see some major profit-taking occur at that level, with possibly lower-lows made, as well, breaking below the 200% Fib level and the middle of its channel in the process.
The last chart shows the recent underperformance of the IBB compared to the $NDX. Price is sitting in between a 200% external Fibonacce Retracement level and the top of its channel. However, the Momentum indicator is showing recent strength of IBB, so I'd watch price action on this ratio chart to see whether it, either, breaks and holds above major resistance (above the 200% Fib level), or breaks and holds below major support (the top of the channel) for possible clues on near-term strength or weakness.