The iShares NASDAQ Biotechnology ETF (IBB) is an ETF is made up of biotechnology and drug companies ranging from small cap to large cap stocks. There is nothing like a blockbuster drug to help juice up your portfolio!!

I posted a chart in the Idea Chamber earlier today for Macrogenics (MGNX) showing its imminent breakout and price targets. Macrogenics is a component of the iShares NASDAQ Biotechnology ETF.

Let’s dive into the chart for the iShares NASDAQ Biotechnology ETF – it’s ticker symbol is IBB. Maybe we will glean some insight as to what the ETF may have in store for its stocks in the new year.

iShares NASDAQ Biotechnology ETF (IBB)

This first chart for the iShares NASDAQ Biotechnology ETF (IBB) is a 5 year monthly candlestick chart. As most Trendy Stock Chart members realize by now, I like to always try and look at the “bigger picture” first to make sure I’ve correctly identified the trend on the chart. Once the trend is identified you can move on to the next step, coming up with a strategy. Let’s first see what IBB’s trend is up to on this chart.

If the MACD Histogram increases higher than its peak in September 2017, [s2If !current_user_can(access_s2member_level1)]……

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I review upside price targets and trading strategies for the index, as well as the long-term potential for the sector.

If you are not a Trendy Stock Charts member, consider joining today! There are several different subscription plans available.[/s2If][s2If current_user_can(access_s2member_level1)]stay long the index or your individual stocks in the index. It could be confirming a breakout above the previous highs. Normally though, selling at the first attempt to break above a previous high is a good trading strategy.

As the index approaches its previous highs, its charts can again be monitored to determine if a breakout or consolidation looks more probable. A consolidation offers a chance to go long your favorite stock or the index itself.

If things keep going as they look, the index should reach its previous highs by the end of March. That leaves for an approximate 18% gain during that time period.

If a Cup Pattern does develop, remember that most successful Cup Patterns develop Handles. Handles typically pullback in the 10-15% range. Keep that in mind when scaling into shares to get long. If you do trim some shares near its previous high, look to repurchase them using this general guideline of a 10-15% pullback. Or just stop by the Idea Chamber and ask for a quick update.

IBB – Weekly Trading Channel

This next chart is a 3 year weekly candlestick chart for the iShares NASDAQ Biotechnology ETF. I’ve channeled IBB’s share price activity for its current uptrend. IBB’s share price sits right in the middle of the channel but is poised to reach the top of the channel in the coming weeks. A potential breakout above the channel also seems possible.

The MACD Histogram on the weekly chart is just starting to show buying momentum, which means the rally should be good for several more weeks to come. Buying volume has also increased the last 2 weeks, another bullish sign.

IBB – Point & Figure Charts

Let’s see what sort of price targets are reflected by the Closing and High/Low Point & Figure Charts.

Closing P&F Chart – Bullish Price Objective of $134

High/Low P&F Chart – Bullish Price Objective of $134

Both the High/Low and the Closing P&F Charts reflect a $134 bullish price objective. This seems to confirm the completed development of the right side of the Cup Pattern.

iShares NASDAQ Biotechnology ETF (IBB) Summary

2018 is shaping up to be a good year for the iShares NASDAQ Biotechnology ETF (IBB). In the immediate near-term, either get long shares from the IBB itself or some individual stocks that make up the IBB. The next significant trading opportunity should be when the ETF reaches its previous highs. If things are getting bullish as anticipated, that should happen no later than the end of March. That is an approximate 18% gain over that time period.

If you have a favorite biotechnology stock, ask for an update in the near term! As mentioned above, I posted a chart for Macrogenics (MGNX) in the Idea Chamber earlier today and will be posting more charts for Gilead (GILD) and Tesaro (TSRO) later tonight.

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