THE INTERCEPT COMES ROARING BACKWARDS -- BIOTECHS STEP ON THE ACCELERATOR -- BEST BUY CHECKS OUT OF THE UPTREND -- XLE TESTS THE TREND LINE AGAIN WITH DIVERGENCE -- THE CANADIAN MINING SECTOR BREAKS OUT

THE INTERCEPT COMES ROARING BACKWARDS... The Biotech Index has recently accelerated with Intercept Pharmaceuticals going ballistic last week. On Chart 1, ICPT shot up from $75 to almost $497 in 2 days. ICPT has since pulled back to $276.00. Investors may look for a basing pattern in the stock here with a tighter stop possible.

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Chart 1

BIOTECHS STEP ON THE ACCELERATOR ... IBB has also started to launch again. The Biotech conference ignited the Biotech industry sector again. The ETF shown in Chart 2 has behaved perfect technically. It breaks through resistance, moves above and then retreats and tests the new support level before moving higher.

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Chart 2

BEST BUY CHECKS OUT OF THE UPTREND... BBY has been surging for almost a year. Looking at Chart 3 on January 11 2013, BBY jumped out of a basing pattern built through the Christmas period of 2012. The stock went on to a 400% gain in 10 months. Recently the stock started to create topping pattern. In November it started to make lower lows and put in a lower high in December. The up sloping trend line was broken on the last Friday before Christmas. When the MACD could not remain above zero, the numerous clues were in place for an exit before today's tragic fall. The real problem is mentally selling the winner after creating such an emotional and financial high.

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Chart 3

XLE TESTS THE TREND LINE AGAIN WITH DIVERGENCE ... XLE is a smooth roller coaster higher as shown in Chart 4. Every low has been a higher low till mid December. XLE suffered a hard pullback Monday and closed just below the trend. It has since bounced up and banged up against the bottom of the 50 DMA that has turned flat. We have a lower low and a higher high in place. We also have significant divergence on the MACD, which is going below zero today. The MACD has been able to turn up from this level usually. This is the first time the MACD has approached the zero line within a month so something is changing. Horizontal support is in the $84.50 - $85.00 range. Investors in this sector may need to have an exit plan if this starts to slip.

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Chart 4

THE CANADIAN MINING SECTOR BREAKS OUT ... $SPTMN shown in Chart 5 is reflective of Canada's mining stocks. TCK, POT and HBM are all surging above resistance levels on the Canadian side due to the weakening currency.

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Chart 5

When viewing on the US exchanges, they have not quite broken out. US investors may find this timely. The Canadian ticker symbols are TCK/B.TO, POT.TO, HBM.TO. All of them have moved above the 200 DMA.

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Chart 6

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Chart 7

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Chart 8

Foreign investors are taking the opportunity to buy stocks with the weak currency and looking for global companies to invest in.