Biogen Stock Is Starting To Trend Higher (NASDAQ:BIIB)

As I look at price charts at the end of the week for potential buys or shorts I noticed a biotechnology company that caught my eye. Biogen Inc. (NASDAQ:BIIB) is basing and I consider it a potential buy. In this article, I will walk you through my thought process and outline why I think BIIB may be in an area where you could enter an initial position. Let’s look at some charts.

Chart 1 – BIIB Monthly

Chart 1 shows BIIB on a monthly chart. BIIB is at the same level it was at in 2013. The green box shows most of the price action for BIIB in the past 10 years. BIIB has been range bound for the past 10 years. The range has been from about $190 to about $390 with a couple of exceptions that pushed past $425. Rallies have been substantial once price reached its low in the range. Consider the lows in June 2016, May 2017, April 2018, September 2019, and November 2020 all corresponding with a blue arrow. Looking closer at Chart 1 you can see that BIIB is trading above the blue six month moving average which is starting to turn higher. Price closing above the six month moving average after a considerable time below that average has also preceded rallies in the stock price. I realize that the month is not over and BIIB can close July below the six month moving average, negating this bullish indication.

Chart 2 – BIIB Weekly with Relative Strength Chart

Chart 2 shows BIIB on a weekly basis. BIIB has been in a downtrend since late June 2021. It’s made a series of lower highs and lower lows. That is the textbook definition of a downtrend. However, that downtrend may now be starting to reverse. The green box on the price chart shows that BIIB made a low in March, then it rallied in April to just above the green box. Price fell to a new low in May and then started to move higher. Price tested the May low in June, but price didn’t reach that low. Since then, BIIB has rallied to the 30 week moving average in blue. This is right at the upper edge of the green box.

If BIIB can break above $225.50, that would represent a higher high in price. Looking at the relative strength ratio of BIIB to the SP500 index you can see that BIIB has been outperforming the SP500 index since April. The relative strength 30 week moving average is now flat and could soon be heading higher. If the SP 500 index has bottomed already, BIIB looks to be an early leader in the new rally. I recognize that the SP 500 index having already bottomed is still up for debate.

Chart 3 – Daily Chart

Chart 3 shows BIIB for the last six months on a daily chart. You can see the basing that is taking place. Price is at the same level as it was back in February. The May 9^th low has not been exceeded and BIIB has been working its way higher. What jumps out at me on this chart is that price is now above both the blue 20 day moving average and the red 50 day moving average. Also noteworthy is that the 20 day moving average is above the 50 day moving average. You have to go back to September 2021 to find the last time those two moving averages were in bullish alignment. Bullish alignment occurs when the fastest moving average, in this case the 20 day, is above the slower moving average, the 50 day. Bullish alignment shows a trending stock to the upside.

Trends always change on the lower timeframe first. We can see that BIIB is putting in a series of higher highs and higher lows since early May. Combined with the analysis of Charts 1 and 2 above I think that you could initiate a position in BIIB at the current price. You could add to the position on a pullback to the 20 day moving average. You could consider being all in on BIIB if BIIB closes above its 30 week moving average and then you see the 30 week moving average starting to trend higher.

BIIB reports earnings on 20 July before the market opens. Perhaps savvy buyers are getting in BIIB now in anticipation of earnings coming in above consensus. I do not have a position in BIIB. I may initiate a position in BIIB this coming week.