Biotech - Bearish BreakoutPotential downside breakout for biotech. Still too early to confirm whether it's real or a fake, keep an eye on this one.
Entered 25% position so far, will look to add more if further confirmation appears.
XBI trade ideas
XBI Biotech ETFWe are waiting the macd and aron cross bull signal, please look the yellow circles, and the break out of the triangle chart...
atr daily time frame is in the bull territory...
we will see...
10 years bullish trendline just few months away from being HiTThe democrats are the biggest threat to the healthcare sector … They do not like the present healthcare system and they want "HEALTHCARE REFORM" , free for all healthcare , FREE MEDICATIONS AND cheap drug prices ,
Biotech down on news, may enter new downtrend.The biotech sector fell today news that Donald Trump intends to sign an executive order demanding that pharmaceutical companies give the US government "favored nation" prices. The news may not be as bad as it sounds, because Trump is apparently only launching a pilot program that will effect a small number of drugs. However, it's hard to predict the market's reaction to the news. Biotech is still above its trendline and its MACD is still above the signal line, so it's still bullish for now. But it could breach both tomorrow and enter a downturn. Beware if XBI falls below about 84.90 tomorrow.
Biotech Sector bullish channelThere is a good RRR to enter XBI today. We seem to be in a bullish channel (showed in chart).
IMMU - Which is 1.5% of the sector, is also a good option. (higher risk - higher reward).
Bear call spread on XBI July expneed to add more bearish positions because I closed a few this morning
opened 86/88 bear call spread for .53 credit
86 is previous R and RSI can't seem to break above 50
OPENING: XBI JUNE 21ST 75/78/92/95 IRON CONDOR... for a 1.04/contract credit.
Metrics:
Max Profit: $104/contract
Max Loss/Buying Power Effect: $196/contract
Break Evens: 76.96/93.04
Delta/Theta: -2.95/1.41
Notes: Back into biotech, collecting one-third the width of the wings. Will look to manage the trade at side approaching worthless (i.e., rolling toward the tested side) with a profit target of 50% max.
Xbi trading plan.Biotech needs to hold $85.3(23.6% Fib retracement). Or next support will be 82.5 or 79.0
$XBI $SPY $LABD $LABU
Technical and Fundamental Factors Point to Shorting OpportunityRising wedge to triple top @ 93-94 then bearish confirmation breaking the neckline @85. Also, upside momentum declining as indicated by the RSI and MACD divergence, with MACD crossing the zero line. Political rhetoric by both Democrats and Republicans suggesting government intervention as the solution for combating rising healthcare cost. Also, majority of constituent names have weak fundamentals (e.g., negative PE) and may be first to be discarded in a major downturn for their high-beta speculative nature. VIX also at all time low and a spike in vol could propel name to the downside quite aggressively. Severe short squeeze may be possible along the way (as we saw today) due to very large short interest in the name. But near-term path of least resistance (trend) appear to be down rather than up.
OPENING: XBI MAY 17TH 80/85/98/103 IRON CONDOR... for a 1.67/contract credit.
Metrics:
Max Profit: 1.67 ($167)
Max Loss/Buying Power Effect: 3.33 ($333)
Break Evens: 83.33/99.67
Delta: -2.03
Theta: 2.02
Notes: Some nondirectional premium selling here in an exchange-traded fund with high implied (24.8%) relative to the broad market; going 25 delta with the shorts, five-wide with the longs and collecting one-third the width of the wings. Will look to take profit at 50% max.
XBI, LABU: I am bullish on LABU and XBI confirms it.Just for knowledge purposes. Check my LABU post.
Rising wedge and double top @ 93, MACD & RSI DivergenceSlow down in China and Europe, Recession in Germany, Trade tension between US/China, Fed capitulation, Bear market rally exceeding 40% from lows, etc., etc., etc... all seem to point towards another leg down, possibly beyond previous lows. Over excitement by the bulls after yesterday's rally adds to my conviction that we may be heading lower, and possibly much lower from here.
XBIBear market rally of 44% off lows, MACD and RSI divergence, double top at 93 and rising wedge all seem to point towards a reversal back down to the lows. This week's ultra dovish Fed capitulation, Brexit/EU uncertainty, drug price control debate, VIX under 14, extended China/US trade talks, ultra-low job creation, slowing economic growth globally and missed earnings, may also be supportive of a downward trend.
XBI = prepare for the next move DOWNSomebody asked me why XBI is going up so much.
When you have such kind of questions you need to see the big picture and control your emotions if you have an open position.
Markets go up, sideways or down because they just reflect crowd psychology.
This is why it is important, during weekends for example, to analyze the big picture.
What I see in XBI is that we are just having a reaction and nothing more.
The channel was broken, XBI went down in a nice 5 waves move (1) and now we see the reaction (2).
As soon as it ends, a new strong move down will start.
It will be a nice short trade with target $50 to $45.
Pair Trading Idea XBI/IBBApplying some of the most popular indicators on the pair XBI/IBB shows an interesting pattern. While XBI has been clearly outperforming IBB since several weeks, a trend reversal seems to occur. IBB might catch up in the coming days and weeks.
under 86 shortoverpriced drugs, many of which are mostly ineffective. short this greedy hog $LABU $LABD $IBB
XBI Sold PutExpiry 18/Apr
Sold 82 P
$133 credit
POP 84%
Suits my macro view and after the gap up, hope to ride some quick momentum and take 50% profits.
