A Possible Secondary Entry in Biogen

 | Jul 31, 2013 | 9:00 AM EDT  | Comments
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Stock quotes in this article:

biib

When I first looked at Biogen Idec (BIIB) on the weekly chart, I became interested in this setup due to the price symmetry I saw with a prior major decline. 

If you look at the weekly chart below, you will see that a prior major decline lasted $47.54, and the most recent decline into the June 2013 lows amounted to a very similar $47.98.

Biogen (BIIB) -- Weekly
Source: Dynamic Trader

We have already seen a very nice rally in this stock off that original symmetry projection. 

Now, if the price continues to hold above this original low, it tells me the potential upside target comes in at the $255.69 area. So, now that Biogen is pulling back nicely on the daily chart, let's take a look at a possible reentry on the buy side, with the weekly chart pattern in mind.

I'm currently stalking a Fibonacci price cluster zone that comes in on the daily chart at the $209.03-to-$214.70 area, with a focus on the $209.03-to-211.75 zone. 

This cluster includes the 100% projection of a prior major swing which lasted five trading days and was $22.99. 

So far, the most recent decline from the July 22 high has lasted a similar six trading days and has amounted to $20.53 -- also also similar to that prior decline. The swing also overlaps a 0.618 retracement back to the June 21 low, which is shaping up as an important retracement level.   

Bottom line: As long as the price holds above this general area, I am looking at taking buy triggers on a 30-minute chart, as described in this prior article. My risk can be defined about a buck below the cluster zone, or below the low made prior to a trigger firing off.

Biogen (BIIB) -- Daily
Source: Dynamic Trader

If the rally does resume, the upside potential I see on this daily chart comes in around $255, which was the original target. I may also post some lower targets if this setup does start to play out, once the key low to run the extensions off is identified. 

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