Chart of the Day - Friday, June 4th, 2021

Today’s Chart of the Day was shared by Alan Cohen (@al_xdpg). It's a daily candlestick chart of the Biotech ETF, $IBB, over the past 10-months. The top stocks in this ETF include Amgen ($AMGN), Gilead ($GILD), Moderna ($MRNA), Illumina ($ILMN), and Vertex Pharmaceuticals ($VRTX). Biotech has been pretty disappointing since February. However, Alan points out that the technicals have improved, and $IBB looks poised for a new leg higher. For starters, it found support exactly where it needed to, at former resistance around $144. Secondly, it broke out of a 4-month downtrend line this week. Lastly, over the past 20-years, $IBB has enjoyed a bullish seasonal tailwind in the Summer months between May-September. Keep in mind, $IBB is still in the midst of a secular breakout that began around this time last year, so the weakness we've seen since February could just be a corrective phase within a longer-term uptrend.