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Like many sectors, the Biotechnology Index, as reflected by the Biotech HOLDRs (BBH), is having trouble breaking a downtrend.

Biotech HOLDRs 60-Minute Chart

Biotechs were able to break a trend; unfortunately it was the up trend on the 60-minute chart that had been in place since the beginning of April. Prices have also fallen below the 50-period moving average, and now look like they could test 115. The 200- period moving average, which is hovering just below 115, should help to keep prices above this level.

Amgen Daily and 60-Minute Charts

Amgen (NASD:AMGN) failed to complete a double bottom pattern on the daily chart, and has now formed a flag. The pros are that volume on the daily chart has dried up on the decline, and the 50 and 200-period moving averages are trying to support prices on the 60-minute chart. The cons are the 50 and 200-day moving averages on the daily chart that are trying to keep prices down on the daily chart. If the Biotech Index should rally, Amgen is going to need some good volume support to push prices past resistance at $62.

Jeffrey Canavan
Assistant Analyst

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