Scott still thinks this $XBI Trade could work in 2023 – December 30, 2022XBI SPY VRNA XBI
This is Scott with your Chart of the Day. It has been a few days but I still think this biotech trade has legs into 2023. If I look at XBI ( NYSEARCA: XBI ) here. This is something that I showed you on the Chart of the Day a little while ago, it is still holding up fine in this market.
When the SPY ( NYSEARCA: SPY ) is still chopping under most of the major moving averages we see XBI ( NYSEARCA: XBI ) in and around and above all the major moving averages. It has been in a long base of consolidation for 3 months. And we are seeing big moves in some stocks like VRNA ( NASDAQ: VRNA ), which was on Dan Fitzpatrick’s active trade list.
I think XBI ( NYSEARCA: XBI ) is definitely a trade that could be on for 2023. If you think about it, a lot of these biotech stocks, don’t have anything to do with the Federal Reserve or interest rates. Isn’t that refreshing?
Now, of course, there is a potential single-stock risk with all biotech stocks and I want to make you aware of that. Some of these biotech stocks individually could have something FDA-related happen, and that could have a major impact on this or other biotech ETFs.
But this setup, right here, is tight. The downward sloping trendline from the high back here in August, progressively lower highs, and progressively higher lows. I want to see this ETF break through that level and do it on volume in 2023, and that is what I will be watching for.