Biotech stocks with weekly breakouts and daily classic retracements | chart of art

This week’s analysis will stick to a multi-timeframe approach. Today we feature a biotech stock that shows a channel breakout on the weekly chart and a classic retracement on the daily chart. Moreover, a larger bullish reversal pattern may form on the daily chart.

The weekly chart below shows that Biogen (BIIB) is in a long-term downtrend but is showing early signs of a bullish reversal. BIIB is part of the Healthcare SPDR (XLV) and Biotech ETF (IBB), which have been leading the market since late October. On the price chart, BIIB surged and broke resistance in September 2022. Stock prices continued to rise until July 2023, before falling in October 2023. This downtrend formed a downward channel (blue trend line) and returned to the breakout area (shaded green). BIIB remained above the 2022 low (green dotted line) and broke the upper line of this channel with an advance in late 2023. This is promising price action.

The display window shows the percentage difference between the closing price and the 40-week SMA. This indicator is part of the TIP Indicator Edge plugin for StockCharts ACP. There are signal thresholds of +5% and -5% to reduce whipsaw. An upward trend has emerged with the indicator exceeding +5% (green arrow), indicating a September 2022 breakout. The upward trend was maintained until the indicator fell below -5% in July 2023 (red arrow). If it moves above +5% it will be bullish again. The daily chart is also showing promising price action, even though this trend-following indicator is not yet live. The stock is trading in a potential reversal zone on the daily chart and a classic bullish reversal pattern could be forming.

This section continues under TrendInvestorPro Members here. TrendInvestorPro’s Chart Trader product provides extensive market analysis and carefully curated trade setups for stocks and ETFs. We focus on bullish continuation patterns. Reports are released every Tuesday and Thursday before the market opens, and each report includes a video. Click here for more information.

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