Few sectors have been hotter over the past few years than biotech.
On the week ending 3/20, (NYSE:XBI) created a reversal pattern (bearish wick) at the top of its multi-year rising channel at (1). Since then, XBI has been a little soft, where it was testing rising support Tuesay morning at (2).
The chart below takes a look at the largest reversal pattern in (NASDAQ:IBB)'s history, which took place last month at Fibonacci Extension resistance with momentum at the highest monthly level in ever.
I continue to believe that you can enhance portfolio returns by keeping a close eye on leadership. Support is support until broken.
With the S&P 500 nearly flat on the year, this support test at (2) in the hottest of the hot is pretty important.