Shares of Biotech HOLDRS (AMEX: BBH) Nearing Breakout Says Market Timer Frank Kollar

August 27, 2009 (FinancialWire) (By Frank Kollar)

Shares of Biotech HOLDRS (AMEX: BBH) are working their way back to another attempt at breaking out.

On July 30, Biotech HOLDRS traded intraday at $104.87 and then reversed. The $105 level is exactly where Biotech HOLDRS stopped its rally in August 2008.

After a classic 3 wave correction, Biotech HOLDRS is again approaching this same level. But a second resistance level is just above $105. Should Biotech HOLDRS surpass $105 it will face the highs reached all the way back in 2005 at $108.

We would consider a close above $108 as a breakout, though short term traders could be in bullish positions from current levels considering Biotech HOLDRS likely attempt to surpass these levels in coming days.

But even then, the 2000 highs were at $124 and that level held only for a week before severe losses set in.

A new rally in Biotech HOLDRS would hit a wall of sellers at $124, assuming shares made it that far. But certainly there is room to profit in the short term. Just be aware of these potential reversal levels as Biotech HOLDRS climbs higher.

The Fibtimer.com (http://www.fibtimer.com) ETF Timing Strategy holds a position in Biotech HOLDRS.

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.

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.

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