Biogen BIIB Shoots the Moon then Falls to Key Support Pivot

Mar 26, 2015: 12:11 PM CST

We saw an interesting price pattern in high-flying Biogen (BIIB) only to see a harsh pullback to the key pivot level.

Let’s note the “Shoot the Moon” rocket play – and return to orbit – to a key trading level on which to focus.

Biotechnology stocks in general have been market leaders, at least until this week’s sharp pullback.

Biogen (BIIB) remains a leading stock as evidenced from the strong bullish rally from the $300 per share December 2014 low to the overshoot high near $500 in March.

On the Daily Chart, I’m highlighting minor resistance pivots and the price breakouts and follow-through.

However, the “Shoot the Moon” breakout into open air above $430 per share went a bit too far and the result has been a sharp, impulsive crash-back to the gravity of the price and moving average pivot near $430 per share.

For quick reference, DO NOT buy a big breakout that results in a hanging doji or reversal candle, especially one followed the next day by a shooting star candle.

In an uptrend, price tends to rally through the upper Bollinger Band and then pullback (retrace) to rising moving averages such as the 20 day EMA (green).

That’s a better spot to buy, especially from a risk-management standpoint (with a well-defined, tight stop in the event price breaks through support instead of continuing to rise higher in an uptrend).

We can see the “Shoot the Moon” then return to Earth event on the intraday chart:

At this point, traders are monitoring the $425 price and 20 day EMA support confluence pivot.

Biogen is a support-buy (pro-trend) play here (green) or else an alternate breakdown/liquidation (short-sell) play under $425 and $420.

Study the pattern and follow price as it moves – either direction – away from the current pivot price of $425.

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Corey Rosenbloom, CMT
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2 Comments

2 Responses to “Biogen BIIB Shoots the Moon then Falls to Key Support Pivot”

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