Biotechs May Have Broken Their DowntrendBiotechnology stocks have struggled this year along with the broader health-care sector, but some traders may think a bullish turn has begun.
The first pattern on today’s chart of the Nasdaq Biotechnology Index is the series of lower highs since early April. NBI closed above that falling trendline yesterday, which may signal a change of direction.
Second, you have the rally between early April and early May. The index retraced half that advance by mid-May and bounced. That may confirm its direction is now to the upside.
Third, this week’s push above the 50-day simple moving average may suggest the intermediate-term downtrend is over.
Finally, the 8-day exponential moving average (EMA) has crossed above the 21-day EMA. MACD is also rising. Those may be viewed as bullish short-term signals.
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