XBI trade ideas
Biotech Sector Likely To Bounce It's been a rough ride for bios lately, but a reversal could be coming very soon. As you can see in the chart, $XBI, the biotech ETF that I like, has fallen to an important VWAP and to the 50% retracement. Today we bounced off of that level, forming a sort of hammer candle on this Heikin Ashi chart. This fund is also currently at the bottom of the daily RSI, which historically is a good sign. This could mean we see a bounce soon, possibly to $150 within the next couple of weeks. I may post more on biotechs now that they should be getting hotter, so be sure to like and follow for more ideas like this :) Good Luck!
S&P Biotech ETF (XBI) - Strong Buy -10May2021S&P Biotech ETF (XBI) is a strong Buy currently at the lower end of its weekly range. Risk/Reward looks very favorable for a long position (Buy) and holding for next 2-3 months (8-12 weeks) for targets of 150-170.
Opening (IRA): XBI June 18th 115 Short Put... for a 1.50/contract credit.
Notes: Weakness and a 30-day implied at 36.63%. 1.32% ROC as a function of notional risk.
Closing (IRA): XBI May 21st 120 Short Put... for a .20/contract debit with 21 days to go.
Notes: Some more pre-vacation profit-taking/clean up. In for 2.17/contract (See Post Below); out for .20 here. 1.97/$197 profit per contract.
Possible "W" formation on XBICould break through resistance or could go back down to support like it did in the past couple weeks, possible put play.
XBI falling wedgeNice walling wedge, already broken out. Looks overall constructive with the RSI and MACD. Coming off 50WMA
XBI rebound breakoutXBI had been in a bear market for months. It tested support at 127.50 multiple times. It finally broke out of it's descending trendline yesterday and back tested it today and found support.
It should pullback a little from the 20SMA on the daily then head higher. Good opportunity to buy on the pullback.
Should hit some resistance around 139.50 which is where the 50SMA on the daily should be.
If it can break those MAs then the next resistance level should be 149.
XBI - Rise of Biotech looks to be comingXBI - the biotech ETF, looks to have completed a large W2 pullback and is now basing for the W3 run. If correct, this looks to be making run for 191 within about 4 months (duration of the W1)
Hourly positive MACD divergenceShowing bull divergence with stochastic at bottom of range turning up
Opening (IRA): XBI May 21st 120 Short Put... for a 2.17/contract credit.
Notes: 30-day at >35% at 40.1%. Selling the 16 delta here. 1.84% ROC at max as a function of notional risk. As usual, will take profit on approaching worthless or, if in the money at expiry, take assignment and sell call against.
OPENING (IRA): XBI MARCH 19TH 135 SHORT PUT... for a 2.11/contract credit.
Notes: With 30-day at 37.5% and expiry-specific at 38.3%, selling a 16 delta in the March cycle (52 days). 1.59% ROC at max as a function of notional risk.
XBI High Conviction ReversalThe Biotech is oversold and is looking to revert back to mean. It is currently at its 180 SMA and ended Friday green forming a hammer candle pointing to an upwards move.
Trade Ideas:
Shares long between 136-140 to 145, 150, 160+ price targets. Bullish.
Short Put at 115 expiring 4/16 for $1.15 Credit. $1150 BPE is a little pricy, but still a decent max ROC of 10% but has a 90% POP. Neutral to Bullish.
Short Strangle 115-160 expiring 4/16 for $2.3 Credit. $1400 BPE, 20 max ROC and 78% POP.
XBI Channel Trend AnalysisJust for fun Biotech trending with channels relative to XBI. Should normally continue Current 1Yr Channel (white) and entering Channel 'B' after been solidly rejected at top of it.
XBI Support on daily, may decide next few weeks (ichimoku)We experienced a very large pull back the past few days and it is reaching the previous high. This may serve as a support on the daily chart.
Looking at the ichimoku, there have been two points recently that the chikou span struggled to cross through the price to signal a bearish sentiment. If this pushes through it may be possible that we are more in the bearish territory and looking for entries on shorts would be best.
Projecting the trend to the cloud, we can also see that the price has been decreasing faster than the projected forecast of the cloud. This may signal a very strong bearish sentiment.
If the chikou span crosses the price and the price crosses the support, I would look into short entries.
If the support holds, I am expecting to go back to the recent highs for atleast a 10% return.
