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Biotechnology Bouncing

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The volatile Biotechnology Index (BTK.X) had a steep four-day run up, which was quickly followed steep five-day sell off. The decline looked to be accelerating today, but we have gotten a little lunchtime rally.

Biotechnology Index Daily Chart

This morning BTK crashed through the April up trend, and looked to be heading straight for the 50-dma. Around 10:30 the decline stopped right at the 38.2% level and a cluster of highs that were set in May. Since then biotechs have been moving higher, but look to be having trouble getting back above the uptrend.

Overall the markets have caught a little bid here, and the major indices are well off their lows of the day. The Internet Index (INX.X) has actually managed a 1.99% gain. So what's Ebay been doing?

Ebay 60-Minute Chart

Ebay gapped down this morning, but has reversed direction and filled that gap. The stock is up 55 cents, and just above $63 where we profiled a short position yesterday. The abrupt reversal is a bit disturbing, but Ebay should meet resistance at the 50-pma. Above that level is a downtrend that can also help to turn prices back.

Jeff Canavan
Assistant Analyst

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