August 4, 2009 (FinancialWire) (By Frank Kollar) — Shares of Biotech HOLDRS (AMEX: BBH) stalled when they reached the $105 level last week.

The $105 level is exactly where Biotech HOLDRS stopped its rally last August, almost exactly one year ago. Biotech HOLDRS then declined 28% to its 2008 lows, much better than the rest of the stock market, but still a substantial decline.

Now Biotech HOLDRS is knocking on the door of those 2008 highs. Even if Biotech HOLDRS surpasses those highs, it will face the highs reached all the way back in 2005 at $108.

We would consider a close above $108 as a breakout. But even then, the 2000 highs were at $124 and that level held only for a week before severe losses set in.

Biotech HOLDRS is a hold if you already have it, but we would hesitate to buy new shares at current levels. A new rally in Biotech HOLDRS would hit a wall of sellers at $124, assuming shares made it that far

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

Frank Kollar has been timing the financial markets since 1982, with online service since 1996. He is a dedicated trend timer and his strategies exited the markets before the crash in 1987 as well as the bear market in 2000 through 2002. During the 2000-2002 bear market, his bearish positions resulted in gains exceeding 100 percent, all achieved by trading trends.

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.

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.

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