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September 3, 2009 (FinancialWire) (By Frank Kollar) -- Shares of Biotech HOLDRS (AMEX: BBH | Quote | Chart | News | PowerRating) stalled at the $103.81 level in late July. But that stall may have reached tradable support.
During August Biotech HOLDRS sold off, reaching a closing low of $97.73 on August 18. Since that low, Biotech HOLDRS rebounded, but then has declined back to this level where it has been testing support.
Biotech HOLDRS appears to have held at support after three days of testing and may be ready to again move higher.
The attractive aspect of this support is that a stop just below, say at $96.50, creates a low risk bullish trade.
No matter how bullish you may be, remember that the 2000 highs were at $124 and that level held only for a week before severe losses set in.
Biotech HOLDRS is a hold if you already have it, but a new rally in Biotech HOLDRS would hit a wall of sellers at $124, assuming shares made it that far.
(The Fibtimer.com (http://www.fibtimer.com) ETF Timing Strategy holds a position in Biotech HOLDRS.)
Frank Kollar has been timing the financial markets since 1982, with online service since 1996. He is a dedicated trend timer and his strategies exited the markets before the crash in 1987 as well as the bear market in 2000 through 2002. During the 2000-2002 bear market, his bearish positions resulted in gains exceeding 100 percent, all achieved by trading trends.
Kollar's research has shown that the financial markets are in tradable trends approximately 80 percent of the time. FibTimer strategies define trends and trade them in both advancing and declining markets. Caring nothing about what newscasters say or what the latest economic indicator predicts, trends are where the profits are, and that is where FibTimer is.
Kollar is editor and chief analyst at FibTimer.com (http://www.fibtimer.com) which offers market timing strategies for S&P and Nasdaq index fund traders, as well as bond, gold, small cap, sector, ETF and stock trading strategies.
FinancialWire(tm) is a fully independent, proprietary news wire service. FinancialWire(tm) is not a press release service, and receives no compensation for its news, opinions or distributions. Further disclosure is at the FinancialWire(tm) web site (http://www.financialwire.net/disclosures.php). Contact FinancialWire(tm) directly via inquiries@financialwire.net.
Free annual reports for companies mentioned in the news are available through the Free Annual Reports Service (http://investrend.ar.wilink.com/?level=279).
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