100% Biogen IDEC Gain Predicted by Technical Analysis

BIIB stock price hit $100 per share on Wednesday gaining 100% since June 2010. The biotechnology company, which focuses on products for the treatment of neurological disorders and other serious diseases, has been one of the top performers in healthcare sector lately. Applying technical analysis on weekly and monthly graphs would have predicted this year’s uptrend of Biogen IDEC’s stock. Whether the trader would have the patience to hold his position for that long is questionable, although the continuous higher retracements and higher highs would strengthen his confidence and trust in the drugs industry’s stock.


The most profound technical analysis signal that would urge the traders to buy the BIIB stock back in 2010 must have been the 61.8% retracement indicated both at the monthly and weekly chart. The stock price had already made it to the upper Bollinger band in March ’10 moving above the resistance level of $55. The Fibonacci retracement level was proven a great entry point, forming an important candlestick continuation pattern in the monthly graph with the July’s green candlestick overcoming the May’s red one, having a doji candlestick in-between. From that month on the BIIB stock price didn’t print a single lower low except a minor lower peak during January ’11 and has now reached $100 per share.


The volume in the daily graph could mean that Thursday’s bar might have been an exhaustion bar, accompanied by the enormous gap. The stock opened at $100 after a Wednesday’s close at $86.57! Not the greatest of times to enter the market if we haven’t been long already. Waiting for a retracement back to $60 should have been the safer trading strategy, but in fact traders should be looking elsewhere for better trading opportunities. Perhaps pointing out the above technical analysis formations in this week’s/month’s charts will lead traders talking about their biggest winner in a year from now, just like Biogen IDEC stock!