The NASDAQ Biotechnology Index (NBI) ends the first half of the year advancing 14.57%. This index containing 220 companies erased the loses registered in December 2018. Despite this gains, NBI still moves under the all-time high at 4,194.78 pts reached on July 2015.
Some characteristics of NBI
The companies have to be listed on the Nasdaq Stock Market. Additionally, the candidate must be biotechnology or pharmaceutical depending on the industry classification. Also, the candidate may not be issued currently in a bankruptcy process. Their market cap must be at least $200 million and must have a daily traded volume of at least 100,000 shares.
The weekly overview
The NBI weekly chart shows a sideways movement bounded by the 2,514.69 pts., and 4,194.87 pts. This long-term range could correspond to a corrective pattern. Since de second half of 2016, the price has moved slightly bullish.
Following the first sequence
Since the bottom of June’s 2016 low at 2,514.69, NBI completed a bullish movement reaching a lower high at 3,865.88 pts. This zone corresponds to 200% of the Fibo Exp. It’s interesting to observe that the price bounced from the 38.2 level. The first sequence has created a new connector which will provide us with information about the next path.
The next path
Once the price bounced after the December low at 2,801.14, NBI found a short-term resistance at the 3,646.16. This zone corresponds to a critical area. If the price breaks and close above 3,636.10 (61.8% Fibo exp) NBI should see fresh highs between 4,153.51 and 4,521.35 pts.
Conversely, if the price can’t strike above 3,636,10 pts., the long-term is not a bullish sequence. A bearish corrective wave could drive it to re-test the June 2016 lows at 2,514 pts zone. The invalidation level of the bullish cycle is at 3,123.59 pts.