XBI trade ideas
XBI Subminuette LookAt this stage I don't see XBI shooting out of the channel. Very likely down move by Tuesday. There is a possible quick retest of the highs before the down move. If we see above average volume on a retest of highs (and unable to make a new one), that would also be a nice short setup. GL
XBI weekly - Long term outlookHere's a quick look at XBI on the weekly and what I see. I'll be shorting everytime it hits the top of the trendline. I'll be shorting every divergence and overbought signals on the 60 & 240.
There's a lot of hype with the bio sector since its 2016 lows, which is exactly what a B wave does. It creates hope, only to have it taken away. This is a multi year outlook. There's no way of knowing where the wave B top will be. This corrective structure can last another 6 months, year, maybe more! We're not "there" yet for the big bio short, but 90% of the time, a setup like this (especially on a weekly chart) is super bearish. Which is why I will always take the sell at the top of the trendline moving forward. GL
LABU - S&P - XBIA few of you asked to update LABU, so here is what I think.
Unfortunatley this doesn't look good. While S&P had a nice rally in the last month XBI and LABU was not able to print a rally. It was in a decline mode.
And now we have a problem as stocks (S&P) might starting to move down into the DCL XBI and LABU might test back the gap or in a worse case it might print a failed intermediate cycle....
I think the sector is waiting for Trump... I wouldn't do anything here right now...
We have to wait if Trump is supporting Biotech - the biggest opportunity for USA - or he just stays at the old sectors...
OPENING: XBI JAN 20TH 51.67/61/61/70 IRON FLYThere isn't much premium out there to be sold in index or sector exchange traded funds, but this is one of them ... .
Metrics:
Probability of Profit: 46%
Max Profit: $518/contract
Max Loss: $415/contract
Break Evens: 55.82/66.18
Notes: I'll shoot to take profit at 25% of max ... .
TRADE IDEA: XBI JAN 20TH 53.33/61.67/70 IRON FLYRotating into exchange-traded funds here ... . EWZ and XBI appear to have the best implied volatility rank/implied volatility percentage metrics. I already have an EWZ fly on, so XBI it is ... .
Metrics:
Probability of Profit: 44%
Max Profit: 5.29 ($529)/contract
Max Loss: 3.00 ($300)/contract
Break Evens: 56.38/66.96
Notes: I'm going to shoot for a fill that is .05 about the mid price of 5.29. If it fills, it fills; no worries. Will look to manage at 25% of max profit as I do with all short straddles/iron flies.
Biotech RideBiotech went wild after Donald entered the white house.
It will rage for a while longer. When it hit the 75 mark, enter short with LABD.
Then ride it down to see the gap closing.
There is a risk that it will close the gap before it hits 75 - by e.g. double topping, but I find it more likely that it will now continue up to 75.
75 is the critical number for the short entry.