After plunging from the late February high and crossing below its short-term trend line, an exchange traded fund that tracks the widely monitored NASDAQ Biotech Index is now testing a technical breaking point that is keeping many investors on their toes.

Stephen Suttmeier, chief technician at Bank of America Merrill Lynch, hopes that the worst in the NASDAQ Biotech Index (NBI) is over and believes a break higher will be critical to prevent a further sell-off, writes Josh Brown, The Reformed Broker.

“The story is the same: The key for the NBI is holding this support (2436-2400) and then breaking above chart resistance and the 50-day moving average in the 2650-2655 area,” Suttmeier said in the article. “A failure to do so in the days/weeks ahead would indicate that biotech is unable to respond to oversold conditions, which would be a bearish sign for the group.”

The iShares Nasdaq Biotechnology ETF (NasdaqGM: IBB), which tries to reflect the performance of NASDAQ biotech stocks, has declined 14.8% since its February 25 high. IBB is now trading 7.9% below its 50-day moving average. Nevertheless, the fund is still up 4.0% year-to-date.

Top holdings in the ETF include Amgen (NasdaqGS: AMGN) 8.8%, Biogen (NasdaqGS: BIIB) 8.2%, Celgene (NasdaqGS: CELG) 7.9% and Gilead (NasdaqGS: GILD) 7.7%

Some technical analysts warn that the ETF may be forming a trend-reversing, bearish head and shoulders pattern. [Another Technical View on the Biggest Biotech ETF]