XBI Pushing Into Resistance

Updated

XBI is pushing back into strong resistance in the range on 96.5 - 100.
Looking for a higher high with momentum divergence to setup another round of weakness.

Note

XBI pushed into the expected target range, and exceeded standard extensions to move a couple points higher.
Unless XBI continues to push significantly higher in the coming days, the current price action is setting up the momentum divergence which would be indicative of possible topping action in the near term. A move back under 97 would setup a failed breakout and open the door for a possible retest of the lows in the low 60s.

Trade active

XBI has pulled back more than 10% since the recently highlighted local top. The breakout level of 97.17 failed on re-test, and price has failed to reclaim the breakout for three consecutive trading days.

There was a strong end of day reversal with considerable volume, so a bounce higher over the coming days would not be surprising to see at this point. This would setup another short trade entry opportunity to continue to trade for further downside. Ideal entry range between the .5 and .618 retrace levels, with a stop at the prior high of 103.5.

Note

Price continued lower after the expected bounce, and has reached the anticipated 90-91.3 range.
Based on the current price structure, it is possible this downside leg had not quite completed, and if that is the case the downside fib extensions indicate a possible target of ~ 84.5 - 83.5, which also aligns with a prior consolidation region from late December.
Since the MACD has completed a 0 line reset at the daily time scale, continued downside would move this into a quite bearish configuration and indicate significant additional downside could be ahead

Note

Price now in the zone highlighted in the prior update

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