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Time to Buy Biotech HOLDRS (AMEX: BBH)?

|Includes: VanEck Vectors Biotech ETF (BBH)

November 18, 2009

Shares of Biotech HOLDRS (AMEX: BBH) declined some 13% in just over two weeks in the last half of October and 15% from their rally high at $104.87 reached on July 30. Is it time to buy?

Shares of this widely followed biotech ETF have rebounded over the past two weeks, but unlike the major stock indexes which are at new 2009 highs; Biotech HOLDRS has regained only about half of its losses.

The October declines were the most severe and shares have regained exactly 61.8% of those losses. That is an important resistance level and if BBH can make a decisive close above $97.75 in coming days, we could see a run for $102.00 a share.

But this ETF does not meet the requirements for either a bullish or bearish trade. It is too risky at this time.

Kollar is editor and chief analyst at FibTimer.com (http://www.fibtimer.com) which offers market timing strategies for S&P and Nasdaq index fund traders, as well as bond, gold, small cap, sector, ETF and stock trading strategies.

Disclosure: No positions in BBH