August 13, 2010
Shares of the ETF Biotech HOLDRS (AMEX: BBH) rallied on Thursday, August 12, while the stock market continued to sell off.
Biotech HOLDRS has been stronger than the general market since it put in a solid double bottom in June and early July, rising some 13% from July to mid-August.
Shares sold off after reaching their 50% retracement level of the entire March to July declines at $96.63. This was also the 200-day moving average.
But half of those losses were recovered on August 12 as shares bucked the trend and rose $.99 or just over 1%.
If Biotech HOLDRS can close above $96.77, look for a run to at least $100 a share and possibly a test of the prior rally highs at $106 a share.
The Fibtimer.com (http://www.fibtimer.com) ETF Timing Strategy holds a position in Biotech HOLDRS.
Disclosure: The Fibtimer.com (www.fibtimer.com) ETF Timing Strategy holds a position in Biotech HOLDRS.