Huge Rally Leaves Biotech HOLDRS (AMEX: BBH) In Dust Says Market Timer Frank Kollar

June 16, 2006 (FinancialWire) (By Frank Kollar)

Thursday’s huge stock market rally left the exchange-traded fund Biotech HOLDRS (AMEX: BBH) far behind. With core positions in Genentech (NYSE: DNA), Amgen (NASDAQ: AMGN) and Biogen (NASDAQ: BIIB), Biotech HOLDRS rose only a fraction while the Nasdaq Composite Index (COMPQ) soared 3% and the S&P 500 Index (SPX) and Dow Jones Industrials (DJIA) jumped 2% each.

Biotech HOLDRS continues to sit near $172.00, which is the 50% retracement of the entire 2005 biotech rally. This level was successfully tested several times in May. Support levels that result in a reversal are powerful bullish indicators. Biotech HOLDRS is apparently unable to mount a rally from support, and support levels that fail forecast continued declines.

Thursday’s tepid response to bullish economic news by the Biotech Industry is a clear signal of trouble ahead for Biotech HOLDRS. This industry sector should be avoided. Fibtimer.com (http://www.fibtimer.com) has listed Biotech HOLDRS as a short position in its ETF Timing Strategy since January 24, 2006.

Frank Kollar has been timing the financial markets since 1982, with online service since 1996. He is a dedicated trend timer and his strategies exited the markets before the crash in 1987 as well as the bear market in 2000 through 2002. During the 2000-2002 bear market, his bearish positions resulted in gains exceeding 100 percent, all achieved by trading trends.

Kollar’s research has shown that the financial markets are in tradable trends approximately 80 percent of the time. FibTimer strategies define trends and trade them in both advancing and declining markets. Caring nothing about what newscasters say or what the latest economic indicator predicts, trends are where the profits are, and that is where FibTimer is.

Kollar is editor and chief analyst at FibTimer.com (http://www.fibtimer.com) which offers market timing strategies for S&P and Nasdaq index fund traders, as well as bond, gold, small cap, sector, ETF and stock trading strategies.

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