Valeant Pharmaceuticals (VRX) is down 14%, Biogen (BIIB) is down 12.3%. I guess it goes without saying that Bill Ackman is having another lousy day. The weakness in biotech is keeping the Nasdaq from experiencing a rally of any sorts today, despite the Dow, SPX, Rut all on solid ground. 

So where does that leave biotech going forward? I take a look at IBB - the iShares Nasdaq Biotechnology Index to break it down for you. 

There is a clear level of support underneath, but more importantly is the downtrend that is converging with the base resistance. Break these two levels at around $290, and you likely have a rally that could go as high as $340. 

Obviously that is huge for biotech stocks, and in doing so would help the entire market make that run towards new all-time highs and beyond.

(Click on image to enlarge)