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.
Looking for a higher high with momentum divergence to setup another round of weakness.
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.
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.
Comment:
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
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
Comment:
Price now in the zone highlighted in the prior update
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.