Helping Self-Directed Investors Succeed Blog - IBB - Poised for Breakout?

IBB - Poised for Breakout?

May 15th, 2012

Biotech Ishares - IBB - has been bucking recent market trend. IBB logged strong technical metrics last week as it surged 3.78% on above average volume. Relative Strength in the last two weeks climbed to high 90s. Last week's strong action had brought the ETF to its annual high of 126.90.

In the last 14 weeks or so, the ETF has been somewhat in consolidation mode even as its relative strength was climbing. The trading range was between $119 and $127. All the key moving averages we track for this ETF are climbing and IBB has been finding support above the 10-week SMA in the past 4 weeks.

The big question is how strong a breakout will be if at all it happens? This week, so far, IBB is down slightly to 126.31 from its closing annual high last week. The last 13-week technical action has not been very robust but bullish technical interest has slightly outpaced bearish technical interest and our ranking system has given a *C* - moderately attractive - rating as of this past week. Going by this technical assessment, we anticipate a moderately strong run if a breakout happens.

The ETF is displaying relative strength and hence is worth keeping an eye on especially on a breakout.

Good Luck and Happy Trading!

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