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Lets Talk Stocks And ETFs: Biotech ETF, FleetMatics Group PLC And NXP Semiconductors NV
Deron Wagner: The Dow Jones, S&P 500, and S&P Midcap 400 rallied off support of the rising 10-day MA to end a two to three day pullback. If Monday’s lows hold, then these indices should be at new highs in short order.
With regard to the broad market, when it’s in trend mode and there is little to no distribution on board there simply isn’t much to talk about. The focus for all swing and position traders should be on leadership stocks and locating low risk entry points.
After a two-week rally off the 50-day MA, biotech ETF ($IBB) is forming a bull flag pattern with a shallow consolidation above the rising 10-day MA.
We prefer to trade bull flag patterns with symmetry. For example, a bull flag pattern that takes 10 days to rise should consolidate for 5 to 10 days before breaking out. Anything longer than 10 to 11 days and we start to ask why the price action isn’t moving. A 5 day bull flag should move out in 3 to 6 days…..etc.
$IBB rallied in 9 bars and has consolidated for 5. An undercut of the 10-day MA out would be ideal to shake out remaining weak longs, but the pattern is ready to go during the next 5 days.
$FLTX broke out from a valid basing pattern last Wednesday on huge volume.
Any pullback to the rising 10-day MA or breakout pivot serves as a decent low risk entry point.
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Source: http://marketdailynews.com/2015/03/03/lets-talk-stocks-and-etfs-biotech-etf-fleetmatics-group-plc-and-nxp-semiconductors-nv/
