NBI
Nasdaq Biotech Index $NBI in bad positionThe NASDAQ Biotech Index ($ NBI) is currently evolving in a well-marked down channel formed by DR1 and suppoty DS1 resistance. In a few days, sellers should test the very strong resistance of $ 3200. This resistance was broken sharply during the fall of the end of 2018, which made it very fragile. The most likely scenario (72%) would be that the resistance of $ 3200 cracks to let sellers get the weekly support of $ 2,800 (WS2). A very interesting trade short offering a risk / reward greater than 2 can be opened on the $ NBI. The target will be set at $ 2,800 and the stop-loss is set to the current value of the 50-day moving average. The trade yields 388 points, a little more than 12%.
Nasdaq Biotech: NBI A good low risk buy point coming up tomorrowNASDAQ BIOTECHNOLOGY INDEX: NBI A good low risk Buy Point Coming Up
Range trading between the parallels continues as it has done since last year's election low.
It' looks like it should fall back to 3267 where it becomes a buy again with stops just under 3250.
It should make a strong rally from here back up to 3575 for about 300 points gain, with
the first level of resistance at 3344 (close out first long here). A subsequent move above 3344
will be very positive for this index, taking up to 3435-3444 range before it falls away to
3380 at which point it should move higher to the 3575 target - at which point it becomes a short again
If this long call from 3266 is wrong, it means that the lower parallel that has guided this up-wave from
inception is also failing, an extremely bearish outcome should the stop at 3245 fail, signalling a move
back to 3168-3148 range (and a complete reversal of positions into near-term shorts) where this
index becomes a strong buy again.
Short biotechnology again near trend line resistance Biotech bubble has burst.
Every rallies are to be sold, and despite the euphoria/new highs in S&P and Nasdaq have barely registered a decent retracement in the biotech sector..
Here's a larger picture of how far biotechs have went since 2008:
The uptrend in S&P is limited, and it will only be a matter of time before it collapses off this rising wedge. However it is also risky to go against Janet Yellen (FED) with unlimited cash in its balance sheet. A short on a specific sector would be a much safer bet.
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I'm long on ZBIO (3x short biotech ETF) at 22.51, with a target around $30~40.
