IBB trade ideas
IBB is at an important level, a break could be uglylPlease look at the text on the chart for the idea behind the trade.
IBB 1 2 3 top Textbook 123 top as taught to me by the most awesome coworker in the world. all time high followed by break of trend 1. retest of major trend 2. then finally break of 300 which makes the number 3. Doesnt get any better then this folks. 50% pullback becomes first target at 218.66
Biotech Bubble Chart - IBB - Monthly Janet Yellen has warned about the bubble in Biotechnology, and rightly so since prices are up 10-fold from the lows in 2002.
Stories of biotech companies getting acquired and then having their drug prices multiplied overnight by unscrupulous owners is going to backlash into new Gov't regulations, at least a rational mind would think.
The game of developing drugs and ripping off customers of their lifesavings is akin to highway robbery. Time for the sheriff to come around and help. Well, the sheriff has spoken: Janet Yellen has warned about the bubble valuations of Biotech stocks and they have rallied 75% since her warning. I recall Greenspan warning about Real Estate in 2002-2003-2004 and then finally by 2007 it was falling apart as new regulations shut off lending. How do you shut down the biotechnology bubble?
I don't know, yet.
IBB 342.59 last 342.52 last 1:22PM EST Sep 21, 2015
Biotech tests very important support zoneThe Biotech bubble bursting hits Nasdaq and makes it the weaker link in the indices chain.
It all began when $IBB broke below 360$, closing below its Fast SMA line, providing the bearish signal by breaking down the weekly uptrend line (see point 1)
August's declines lead $IBB to re-test another weekly uptrend line and the 300$ support zone - This created a rally back towards 360$ that ended when the price was rejected by the 360 structure and the Fast SMA line that flipped roles to resistance.
Now, three week's later, $IBB is re-testing the 300$ (currently inside the zone). It is also re-testing the same uptrend that helped it during August.
That is a critical zone for Biotech. The next support zone is near 260$ and below it, the 200 weeks MA waits near 230$.
If $IBB will manage to find the necessary support inside 280-300$ again, it could lead to a rally towards its 50 weeks MA line that should turn to resistance now.
A close above 300$ could be a bullish confirmation signal that we are heading there.
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IBB Possible 5-10% retrace - Price above correction base POC.
- Plenty of vol catching this, making a higher low since the Black Monday's sell off.
- Some nice volume with the pop of the trendline resistance.
- Three 'white' soldiers on 1H time frame.
First stop the naked POC at ~310, if this breaks a move up to ~320 with a max of ~334 before continuing its path down.
IBB - How did that work?Its not what method you choose to trade. It is how well you can contain your emotions and stick to your plan, no matter how bad / great the media and other influence.
The Difference between Genius and Stupidity is that Genius has its limits. - Albert Einstein.
SHS in spe IBBSHS Target 335 over a month
On the premise that the top has been set in IBB I see the following SHS setting up.
Target 335 around mid august. and lower target later yes year!
I have the the technical argument below
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IBB Channel (Bearish)We've seen the IBB have trouble with this 368 level many time. We've now touched on it 3 times. and the highest probability move would be back down to the low of the May18-June 6th Channel.
While I still expect a bounce from the oversold condition onthe indexes (QQQ's etc) I am considering a speculative IBB Put (Short) Position for the next 2/3 trading days.
We are at the lower end of the Implied Volatility range on IBB (31%), so the premium is fairly reasonable.
One Contract for a 365 Strike Put with about 11 Days to expiration costs $600, and would be worth $900 if IBB hits 361 (or the bottom of its channel). Thats a 50% Gain.
Stop loss would be 369 or 370 area.
IBB: Going Sideways?This chart is a little busy so allow me to explain what whats going on here. The Green trend lines is long term support/resistance formed in the 4th quarter of 2012. The red trend lines were formed in late 2014. And the blue trend lines is the most current trend.
Ultimately, I think we are going to get a prolonged period of sideways volatile action out of IBB for two reasons. First off is the immediate sell off after hitting the upper green trend line. Every time the IBB has touched this trend line it has pulled back to the lower green trend line. Second, I have not seen this type of volatility in IBB in an extremely long time. I do not believe the huge swings from the highs and the lows can sustain neither a breakout or breakdown. At this time I believe it is most logical for IBB to consolidate in a zig zag channel for a period of time.
Today's price action is interesting because it backed off as soon as it touched the support line of 2014, a classic example of where support becomes resistance. But we can not ignore the fact that IBB had its highest close in the last few weeks. I think it is 50/50 we see immediate follow through from here to 360-370 or come back to the support zone of 325-335. The higher percentage trade would be to wait for price to come to these sell and buy zones.
**Any strong impulsive moves into and through my stop zones will indicate that IBB has come out of this bounded range and has begun its' new trend. That goes for both breakouts and break downs. The green trend lines would then become the targets for the new trend.
IBB $339.34: Corrects to break below 6-1/2month rising trendlineIBB corrected lower from the YTD high at 374.97 (March 20, 2015) to break blow 6-1/2 month rising trendline (as shown on the weekly chart), signaling prolonged consolidation near term. Bears look to test the range support at 333.78 (March 26, 2015 low). A breakdown is needed confirm a double top at 374.97/368.25 and weaken further towards the 305.01/302.98 long term support area. However, if the 333.78 area holds dips, that would reinforce the level as support. Back above 353.11 would suggest scope for further gains towards the 368.25 swing high (April 23, 2015).
Outlook:
Short term: bearish
Long term: bullish
Biotechs could be completing a rare cyclical blowoff. A super-exponential, log-periodic blowoff began in late 2012, culminating in early 2014, after which a second-order acceleration began after May 2014 and continues to date, although the price acceleration could be exhibiting exhaustion with the daily price breakdown today, Apr 27, 2015.
A typical "anti-bubble" trajectory following a bubble blowoff implies IBB declining eventually to ~100 (or even below).
Biotechs and AAPL are exhibiting a similar blowoff as did the Dotcom stocks in 1998-2000, homebuilders in 2005-06, and gold stocks in 2010-11.
IBBPotential Bat here. This has been, of course, a huge winner - I think it makes sense that Johnny Come Lately's would jump in here for another hurrah.
IBB- Speaking Of A Pullback To Multiple Supports?4-2 Speaking of a pullback to multiple supports?
As long as this issue stays above the blue
support lines all is well. This level also
happens to be near the 50 day SMA.
If you like these kind of chart set ups
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@AmazingPatterns
For educational and informational use only,
these are not recomendations , trade at
your own risk
Did Friday marked the current top of BioTech?After breaking and violating my previous setup on $IBB, the selling action we've seen on expiration date could mean that options traders finally think $IBB has reached too far.
When this selling action comes with a daily bearish AB=CD pattern, it becomes interesting.
If indeed we will see a pullback, the first point of interest will be the meeting point with the broken trading channel shown in the chart. That will be the test point for the bulls - They can either confirm the breakout by buying at this level, or fail to hold against selling pressure and the breakout will turn into a false one, signaling the bears to keep on pounding a very overbought market.
I'm with the bearish AB=CD pattern, meaning - short.
