Biotech tests very important support zoneThe Biotech bubble bursting hits Nasdaq and makes it the weaker link in the indices chain.
It all began when $IBB broke below 360$, closing below its Fast SMA line, providing the bearish signal by breaking down the weekly uptrend line (see point 1)
August's declines lead $IBB to re-test another weekly uptrend line and the 300$ support zone - This created a rally back towards 360$ that ended when the price was rejected by the 360 structure and the Fast SMA line that flipped roles to resistance.
Now, three week's later, $IBB is re-testing the 300$ (currently inside the zone). It is also re-testing the same uptrend that helped it during August.
That is a critical zone for Biotech. The next support zone is near 260$ and below it, the 200 weeks MA waits near 230$.
If $IBB will manage to find the necessary support inside 280-300$ again, it could lead to a rally towards its 50 weeks MA line that should turn to resistance now.
A close above 300$ could be a bullish confirmation signal that we are heading there.
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