Biotech Blues Could Continue

“Taking a look at the five-year weekly chart of the SPDR S&P Biotech Index ETF, you cans see that it has been trading within a clearly defined uptrend since late 2011. Recent weakness has pushed the price of the fund below the trendline, which based on technical analysis, is a significant sell signal. The recent bearish crossover of the MACD and the zero line will likely be used as confirmation of the downward momentum and many bearish traders will likely protect their positions by placing a stop-loss order above the trendline or short-term high near $80 depending on risk tolerance,” according to Investopedia.

Traders looking to profit from ongoing declines in XBI can consider the Direxion Daily S&P Biotech Bear Shares (NYSEArca: LABD), which attempts to deliver three times the daily inverse performance of XBI’s index.

SPDR S&P Biotech ETF