Chart of the Day - Wednesday, December 4th, 2019

Today’s Chart of the Day was shared in a note from Frank Cappelleri of Instinet. It's a monthly bar chart of the Biotech ETF, $IBB, since its inception in 2001. Frank points out that $IBB just had its best two-month run since 2003, gaining 20% between October-November. He calls it "very extended" in the short-term, with the ETF printing its highest RSI reading ever. He explains: "It's safe to say that this kind of pace can't persist." He adds that longer-term, $IBB could be in the process of building a multi-year base, saying: "The ETF remains below its most recent peak from 2015. And that means this spike could simply be part of the consolidation process before the next multi-year breakout." Bullish or bearish, it would be wise to keep Biotech on your 2020 watchlist.