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Hold That Line

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Support lines are being tested all over the place. Some are holding some are not. The Nasdaq-100 keeps trying to climb into positive territory, but keeps getting turned back. Semiconductors are trying to lead a rally, while biotechnology is trying to spark a sell off.

Biotechnology Daily Chart

Perhaps it has something to do with President Bush announcing his decision on federal funding for stem cell research tonight, but the Biotechnology Index (BTK.X) is today's worst performing sector, down 2.93 percent. That puts the index below near term support at 500, and testing support at 473, the top of the April double bottom pattern. The sector is oversold, but can it hold at support long enough for the stochastic to turn up?

Amgen Daily Chart

Amgen (NASD:AMGN) was having trouble getting above resistance at $63, and has finally decided to move lower. Yesterday the stock dropped, but held at the $60.50, the 50% retracement level. Amgen is trying rally off its lows today, but is still down $1.04. Should Amgen continue to decline, $58 might be mild support, but $53.40 looks stronger.

Jeffrey Canavan
Assistant Analyst

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