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Is the Biotech bounce coming to an end?  The $IBB(iShares Biotechnology Index ETF) has traced out a powerful rebound following a steep December sell off.  At last week’s high the index had gained over 23% from the Dec. 24th spike low.  This impressive move has lifted $IBB back up to major resistance near the 200 day moving average.  The 200 day has capped the previous two monthly highs and appears to holding firm once again at the January peak.  Pullbacks from the 200 day have not been shallow of late.  A third straight may be on the way.  On the upside, a close above $112.00 would not only clear the 200 day but would take out the November and December highs as well. 

Current $IBB holders may want to lighten up a bit.  The pattern since early November signals a pullback, possibly a deep one, is more likely than a fresh rally leg.

At time of publication we do not have a position in $IBB.