November 5, 2009 (FinancialWire) (By Frank Kollar) — Shares of Biotech HOLDRS (AMEX: BBH) have taken a heavy hit these past two weeks, but may have reached a short term support level.

After breaking to the downside from a pennant formation on October 21, shares of Biotech HOLDRS continued to fall until reaching a low of $88.89, some 15% from their rally high at $104.87 reached on July 30.

This low is a fraction above the critical 61.8% retracement support level at $87.95 for the March to July advance.

This is where Biotech HOLDRS would be expected to stop its declines and possibly to rally from.

However a decisive close below $87.95 would forecast a test of those same March lows, down at $77.50, so traders looking to profit from a bounce should maintain a buy stop under $87.95.

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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