The iShares Nasdaq Biotechnology ETF (IBB), which we have been long in the model ETF trading portfolio of The Wagner Daily since August 14, showed relative strength by rallying 0.9% while the S&P 500 was flat yesterday (August 22). More importantly, it closed just above an area of near-term horizontal price resistance. For swing traders who missed our original August 14 buy entry, IBB is now presenting a secondary buy setup (or a place to add additional shares to existing position). The first chart below is of the hourly timeframe, which shows yesterday’s breakout above the near-term technical price resistance (the dotted blue line):
Shifting to the daily timeframe, notice that yesterday’s rally in IBB also correlated to a breakout above the downtrend line from the July 27 high (the descending blue line). Since this ETF has broken out above resistance levels on two different timeframes, it further increases the odds of IBB moving higher from here. If looking for a secondary buy entry into IBB, consider a buy trigger above yesterday’s high of $134.32, which would confirm the breakout above resistance:
IBB is presently on our Potential Breakout watchlist, near the top of the list due to the relative strength to the broad market it has been showing.
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