After printing a new 52-week low in February XBI started a new multi-month uptrend making higher highs and higher lows.
The linear regression channel drawn from the February low to the last trading day with the upper and lower lines 1.5 (blue) and 2 (pink) standard deviations away shows the overbought and oversold conditions of this uptrend.
The last two declines to oversold levels are defined by the Raff regression channel (light blue). The selling pressure during both declines was almost equal. However, the November-December downswing traveled only half distance (in percentage terms) of the September-November decline and took more time showing the increasing demand. The last week XBI bounced from the oversold levels breaking above the upper line of the interim descending Raff regression channel on above average volume.
The volatility adjusted short-term Point and Figure chart shows the increased selling pressure (red arrows) in December which failed to lead to a bigger decline. The price snapped back confirming the growing demand and forming “a spring”.
The quantified price/volume structure suggests that XBI has started a new upswing with a potential move to the 70-71 level. The decline below 60 would compromise this scenario.