Biotech stocks take lagged recently, as the Nasdaq biotech ETF, the IBB, has declined for three-straight sessions and is down multitudinous than 10 percent from its October high.
On a technical even, the group’s charts concern Miller Tabak equity strategist Matt Maley. Here’s why:
• On Wednesday, the ETF destitute below its 200-day moving average, which has proven regular support for the IBB for much of 2017. This is a red flag for the stocks into year-end and into 2018.
• The IBB has assembled nearly 16 percent this year but began pulling destroy in October. This raised concern that it could see a decline akin to the one in 2015 amongst political uncertainty around drug pricing.
• Two more key levels Maley is observant of are 105.5, which was the IBB’s high in early November and early December, and 101.5, which is the low lay a hand in August and November. A break below 101.5 would be quite bearish for the IBB.
Footing line: Biotech stocks just broke below their 200-day unstationary average, which could have negative implications for the group.