XBI trade ideas
Biotech Channel Held 7/21/2020This is XBI at the 4 hour view. It seems that my biotech channel was a success. XBI tried to gap above the top of the channel. However, whenever the price goes above the long-term channel, it tends to get hammered right back in.
This may provide some safer short opportunities under these conditions.
1) XBI is at the top or above the top of the channel.
2) VIX is about found support.
3) After the hype of some vaccine news.
Equities - Own What is Working! Pt. 3Please check out my blog post for the full details:
www.derzzycharts.com
Now we may be seeing a double RSI divergence coming up here, which is where we exit another third of our position. Very key to also think on the bullish side here and consider that the RSI could hit new highs, which discounts the bearish divergence. Very key to watch at these levels because we are either adding capital on the pullback or locking in gains if the double bearish divergence is confirmed. What about QQQ?
Equities - Own What is Working! Pt. 4
Happy Trading!
Brandon Anderson
brandon@derzzycharts.com
@derzzycharts
www.derzzycharts.com
Biotech Stock PerformanceStocks which outperform Biotech index since Mar 18, 2020 - the beginning of a new trend.
NVAX, NVTA, IMMU, INO, BCRX, TGTX, OPK, RARE, ARWR, MRNA, HALO
Biotech Channel 7/18/2020I've noticed that most tech related ETFs and the NQ are in the same general channel.
This is the XBI at the 4 hour view. It's the biotech ETF. As you may see, my buy zone is way below. This may be due to the coronavirus vaccine hype. Not sure.
Either way, biotech has been grinding at the top of my channel for a while. If it pops above it, it will likely get hammered down.
I'll short it if it pops above my channel and go long when it gets hammered down to my buy zone.
Quick Flag Break to ResistanceNeed to see short term continuation above the recent 114 resistance, S/R flip possibly, to remain bullish.
Strong move up from recent flag after flag pattern, but the quick stall out causes concern for weakness.
If it fails to overtake the 114 level, then likely pullback to the volume shelf around 104 which could coincide with a MACD bearish crossover and possibly result in a relatively large bearish divergence.
Short term - Neutral until immediate move up above 114 to long the continuation towards the bottom of the previous channel (blue)
XBI - On the verge of ANOTHER historic 300% run?First 5 years were quite disappointing for XBI, as it was locked in a big "penalty box" from the spring of '06 to the spring of 2011... BUT is was slowly building a BIG ascending triangle, fraught with false breakouts (blue arrow), and FINALLY, a break-and-retest of the all time highs (green arrow). From this ATH (upper boundary of the box), to the blow-off top in July 2015, the NET gain was almost 300% over 4 years, on an UNLEVERAGED, DIVERSIFIED ETF!!!
How cool would it be if history repeated itself? XBI found itself again inside of a big nasty "penalty box" over the last 5/6 years, BUT it managed to form a BIG ascending triangle, fraught with false breakouts (blue arrows), and FINALLY, a break-and-retest of all time highs (green arrow). Will it quadruple over the next years just like last time? In 2011, rates had been cut aggressively and the world was coming out of a backbreaking recession... Sounds familiar? Just beware of externalities that may rock the boat!! In Agust 2011, the US debt downgrade and the European debt crisis plunged equities into a hole, but for biotech, it was only one last scary shakeout (red arrow) before a historic run!
Full disclosure: I own several biotech stocks totaling over 20% of total assets, and am actively seeking to increase my exposure to this sector. While I don't own XBI, I have reccomended it and similar funds to people unable or unwilling to buy individual stocks. Only buy the amount of stock that you can be sure to hold in the worst market conditions. The bigger the potential upside,
the bigger the risk of temporary drawdowns. And they come when you LEAST expect them. Just look at June-August 2011... Buy on pullbacks, NEVER chase prices.
Sector Rotation Strangle - Long Bio, Short Specialty RetailThis is a complex play that involves a lot of risk and the use of options on both ETFs and Stocks.
Goal: Capture the apparent sector rotation activity between Biotechnology and Specialty Retail.
I have been waiting quite some time for these two sectors to start playing out the way they ought to, based on earnings across the board and common sense.
I see LULU's miss as the final act before the fringe players in the retail space get hammered down.
I have also been waiting for biotech to turn, as it has been stagnant for quite some time. I think getting into VRTX is wise, as it is one of the top players in the space and just got a nice price upgrade.
Meanwhile, while longing VRTX and XBI (bio ETF), I plan on buying a put position in URBN (worst specialty retailer) and XRT (specialty retail ETF.
Again, very risky play given the current market environment, but the tape tells me this will work.
Let's see.
AMEX:XBI AMEX:XRT NASDAQ:VRTX NASDAQ:URBN
Biotech - 3rd Time is a charm?What I see...
+ Long hammer that closed above 10ma
+ 50ma has just crossed above the 200ma
+ Prices have just broke above the neckline of a head and shoulder pattern
+ RSI is flat at 59.2
+ MACD is below the signal line but in bullish territory
+ 10ma continues to play Support role
- Bearish engulf on -1d bar
- Today's vol. is lesser than -1d
What I setup...
+ Long entry above today's high
- Stop under today's low
+ Target at 1.613 fib
:: Duration - 2 to 3 weeks
* Comments and Likes are appreciated; Subscribers are oil rich! *
BioTech - I want to get in!** Comments and Likes are appreciated; New Subscribers are excellent! **
What I see..
+ I tried to get into XBI last week but got stopped out
+ Friday's bar painted a bullish kicker with a strong close above 10ma
+ MACD is bullish but merged
+ RSI at 63
+ Bollinger is narrowing...
- Immediate resistance at all-time high
- 50ma is still under 200ma
- MACD appears to be turning south
What I setup...
+ Long entry above Wednesday's high
- Stop at last week's low
+ Target at .618 Fib
:: Duration - weeks to months!
BIOTECH. Bigger the base bigger the raiseThis will rocket ship until the corrections in July/September buy now sell then. Wait for correction buy again.
I am longing this. Arguably best sector to be in a covid world.
Is BioTech ETF Set for a Rally?* Comments and Likes are appreciated *
What I see...
+ Head and Shoulder pattern started forming as early as Dec
+ Found Support back in mid-March
+ Tested $100 neckline and pulled back to the .786 Fib
+ Last week, prices retested the neckline and consolidated in a side way move painting 2 NR7 bars
+ MACD is flat but in positive territory
+ RSI is at 64 after bouncing off of 50
- Prices pulled away from 10MA
- 50MA is still under the 200MA
What I setup...
+ Long above neckline
- Stop under last week's channel low
+ Target is 618 Fib
XBI LongBiotech stocks looking strong, a lot have made new highs already. XBI looks like it's gonna follow suit. Old high is at the top purple line. That's the first target, after that is price discovery. Indicators are looking good and price is converging. Should see a pop or drop in the next few days. Only was I see a drop is if the market itself takes a dump.
XBI Potential What is XBi?
XBI provides exposure to one of the broadest portfolios among US biotech ETFs. The fund equal-weights its portfolio, which in turn emphasizes small- and micro-caps and greatly reduces single-name risk. Thus, the weighted-average market cap is much smaller than some competitors. Unlike other funds in this segment, XBI is a pure biotech play, with relatively small pharma overlap as we see it. This highly efficient fund, which charges less than competing funds, has a history of beating its index due to revenue from securities lending. It has attracted a large asset base and trades with excellent volume. The fund’s alternative take on the space earns it a place on our Opportunities List.
Looking like we could see a pull back here or breakout.
Risk and reward is in our favor here. if it rejects, it can go to $95 area, if it breaks out, we can just stoploss for $1.
S&P Biotech vs. S&P PharmaceuticalsThe 2 strongest industries within HC - would like to see momentum confirm the move higher.
