TRADING BIO

[TREND1]

The next chart shows the Biotech SPDR (XBI) forming a head-and-shoulders top from April to September and breaking neckline support with a sharp decline the last two days. Regardless of the pattern, the ETF formed a lower high in mid September and broke below its August low. This lower high and lower low sequence means the ETF is in a downtrend. The blue trend lines mark a falling channel and the ETF is nearing the lower trend line, which suggests that XBI is getting short-term oversold. Broken support in the 70 area turns into the first resistance area to watch should the ETF bounce.