When it comes to “leadership” in the stock market, Bio-Tech (IBB) has filled that role rather well over the past 5-years, in both directions!
When looking at how IBB did compared to the S&P 500 from the lows in 2011 to the highs of this summer, IBB left the S&P 500 in the dust, gaining 250% more (see top chart below).
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IBB also led the S&P 500 to the down side this summer, as it fell over twice as much as the broad markets.
Below looks at the the current patterns on IBB and reflects that leadership, is facing an important test.
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As mentioned above, IBB remains inside of a multi-year rising channel. The decline from this summers high, did not break channel support. In our free webinar of a month ago, we shared that several positive messages were coming from this sector and Premium Members have been long a key bio tech stock since 10/9 and are up over 15% since the purchase.
IBB has created a series of lower highs since July. At this time, IBB is up against falling resistance line (1) above.
Bottom line…IBB remains a leader in both directions and is attempting a breakout in a bullish rising channel.
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