Biotech shares have lagged recently, while the Nasdaq biotech ETF, the IBB, has declined for three-straight classes and is down more than ten percent from its October huge.
On a technical level, the group’s charts concern Miller Tabak collateral strategist Matt Maley. Here’s why:
• On Wednesday, the ETF broke below its 200-day moving common, which has proven sound support for the IBB for much of 2017. That is a crimson flag for the shares into year-end and into 2018.
• The IBB offers rallied nearly 16 percent this season but began pulling back in October. This brought up concern that it could see a decline comparable to the one in 2015 amid political uncertainty around drug pricing.
• Two more key amounts Maley is watching happen to be 105.5, that was the IBB’s saturated in early November and early December, and 101.5, which is the low touched found in August and November. A break below 101.5 would be quite bearish for the IBB.
Bottom line: Biotech stocks just broke below their 200-day moving average, that could have bad implications for the group.