Where are the supports on Biogen Inc?

[iwantmoney]

[Rakesh Upadhyay]

Biogen (BIIB) fell 29.23% yesterday as the company shelved their Alzheimer's trials. The traders just dumped the stock. Let's see if we find any strong support close by or does it have more room to fall?

 

After the fall, the stock has dropped close to the critical support level of $205.42. The stock has not broken below this level since late 2013, which shows its importance. As the downward momentum is strong, the stock might dip to $179.30 but we expect the zone of $205.42 to $179.30 to attract buyers.

The RSI has dropped close to the oversold zone. In the past decade, the stock has always bounced from close to the oversold zone. The RSI never fell below 30 levels. But it is important to note that during that time, the stock was in a strong bull trend or was in a consolidation. Still, as the supports are close, a bounce can not be ruled out. The extent of the rebound will give a better idea whether the bottom is in place or not.

From the current levels, the stock might fall about 10% and then rebound.