The SPDR S&P Biotech ETF (NYSE:XBI) spiked to a new post-November high at 82.38 on Tuesday (7/25), which neared my optimal, upside target zone of 83.00/50 projected from the June 26 through July 10 bull-flag formation.
Since then, however, it has reversed sharply and has sliced beneath its June-July up trendline at 80, briefly pressing beneath its flattening 20-day MA (79.01).
Thursday's weakness inflicted some damage to the near-term uptrend, which is undergoing a minor correction that has to be contained above 77.00-76.80 to avert XBI becoming vulnerable to a more serious, deeper correction.
The juxtaposition of my daily momentum gauges suggests strongly that unless XBI closes above 80 — neutralizing Thursday's negativity — we should expect another rollover into a retest of 78.15–77 near-term support.
