iShares Nasdaq Biotechnology ETF (IBB)

A request came from a Trendy Stock Charts member to look at the charts for an index from the biotechnology sector. That index would be the iShares Nasdaq Biotechnology ETF (IBB).

If any chart patterns can be identified for the index, those patterns are a good starting point for stock charts of individual companies. Most companies tend to follow the general direction of the index. Some companies will outperform while other companies lag. Investing in the index of a hot sector can help eliminate the risk of purchasing the lagging companies.

So let’s start the chart review for the iShares Nasdaq Biotechnology ETF (IBB) and see what patterns may be brewing.

IBB Cup Pattern

This isn’t the first time I’ve looked for patterns on the iShares Nasdaq Biotechnology ETF (IBB). My last feature length article for the iShares Nasdaq Biotechnology ETF (IBB) was in January 2018. Here is a quick link back to that article.

“1/12/2018 – Happy 2018 for the iShares NASDAQ Biotechnology ETF?”

In the January article I outlined a Cup Pattern that appeared to be developing. However not too long after my article the pattern got detoured a little bit. After a 3 month consolidation period the index is once again though starting to advance.

I do not think I would refer to this as a Cup Pattern any longer.

The gray shaded box is the short-term target for the index’s current uptrend and continued development of the “cup-like” pattern. But after the detour on the Cup Pattern, The Elliott wave pattern has clarified to some extent. I moved the Anchor Points on the black Fibonacci Extension Tool to reflect the clarification I see. The new chart looks like this.[s2If !current_user_can(access_s2member_level1)]…….

If you want to continue reading this article for the iShares Nasdaq Biotechnology ETF (IBB), you must first login. 

I review long-term bullish price objectives for the iShares Nasdaq Biotechnology ETF (IBB) and the patterns that will help the index reach those price objectives.

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)]

IBB & Its Golden Ratio

This next chart is a 5 year weekly candlestick chart to look at a few more details than a monthly chart provides. As mentioned above, I moved the Anchor Points slightly on the Fibonacci Extension Tool based on the Elliott wave pattern I can identify. I changed the coloring on the Fibonacci Extension Tool to blue since I outlined Waves 1-5 of the Bullish Impulse Wave using black trendlines.

The 3 anchor points for the blue Fibonacci Extension Tool are placed as follows:

• at the beginning of Wave 1 of the Bullish Impulse wave pattern
• at the end of Wave 5 of the Bullish Impulse wave pattern
• at the end of Wave C that corrected Waves 1-5

In short, the blue Fibonacci Extension Tool is placed on a complete 8 wave cycle for the IBB. Placing a Fibonacci Extension Tool on a previously completed cycle can help to provide price targets for the next leg of the cycle. The 161.8% Target Line is the price target for the next leg of the cycle. The 161.8% Target Line would represent the Golden Ratio for the current uptrend.

IBB – Point & Figure Charts

The iShares Nasdaq Biotechnology ETF (IBB) closed at $118.35 on Friday. With that in mind, the price targets from the Point & Figure Charts are as follows:

Closing P&F Chart – $151 Bullish Price Objective

High/Low P&F Chart – $136 Bullish Price Objective

Those 2 price targets represent an approximate 15 – 30% growth opportunity. Based on this I would say that the P&F Charts confirm my analysis above of a probable breakout for the iShares Nasdaq Biotechnology ETF (IBB).

iShares Nasdaq Biotechnology ETF (IBB) Summary

The longer-term charts for the iShares Nasdaq Biotechnology ETF (IBB) continue to look bullish. This update confirms my bullish initial analysis in January when I asked if 2018 was going to be a good year for the index. The charts say yes it has been and will continue to be.

The index should approach and surpass its previous all-time high before year-end. As with most uptrends though, expect a possible consolidation period once the index reaches its previous high. But a continued advance towards its Golden Ratio means that its consolidation period will be relatively shallow and short.

But selling at the previous high is always a good strategy and then wait for any pullback to develop. That is the chance to reload any sold shares before the pullback developed. As the index approaches its previous high, stop in the Idea Chamber and request an update. It may be easier after a little more chart activity to calculate the price target before the consolidation period begins.

So if the index looks bullish, that means good things for most stocks in the index. If there are any individual stocks you are interested in, drop a request in the Idea Chamber. There is already one on the radar for Trendy Stock Chart members – Geron Corporation (GERN). Let’s hear about some others!

Good luck trading!

[/s2If]