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IBB trade ideas

IBB: Anatomy of a 'sell' signal Part II: 03/21/2013IBB down 4.7% on Friday on heavy volume which may have been related to Op/Ex. Selling in biotech issues weighed heavily on the $NDX/QQQ's, which was also under pressure from SYMC's big drop, and then all that selling apparently spooked the rest of the markets. While this may just be a one day sell-off for the QQQ's and others, I don't believe this is the case for IBB. IBB has two Fib A-B-C down structures in place. For the first, IBB is at the 138.2% level of 246 so I have chosen to use the larger A-B-C structure of Fib extension levels. The next Fib extension target of this larger structure is the 1:1 level at 239 and after that we have important support at 233 and then the 138.2% extension at 224. The important level remains 233 as IBB has not taken out a previous swing point going back to November 2012. If IBB does not stop its decline at 233, then this would be new behavior and you can expect other swing lows to be taken out in time. If IBB does in fact take out the 138.2% target, then the next extension targets are: 161.2% at 215 & 261.8% at 200. If you look at the chart, you can easily see that IBB is moving within the confines of what appears to be a bull flag. I didn't mark this because the chart is already too cluttered. The key to this pattern is the 233 level because should IBB drop below that, then the bull flag morphs into a falling price channel for however long it stays within that channel. Until IBB ends its decline, it will put pressure on the QQQ's and IWM so IBB needs to be watched closely until it finally bottoms and reverses. IMHO and subject to change without notice. GL
NASDAQ:IBB
by CurtisM
21
IBB Daily: 03/13/2014On March 1st, I put up a chart of IBB in which I pointed how, during pull backs, IBB likes to visit its 50MA. Now, as of the close of trading on 3/13, IBB is within easy reach of the 50MA, which is also in the area of the .764 Fib retrace level. IBB is also moving within the confines of a Bull Flag pattern and has broken topside out of similar patterns in the past. Or is this a falling price channel which will take IBB lower? As long as IBB breaks topside out of this bull flag pattern before it reaches or takes out $233, then this is a bull flag. On the other hand, should IBB close below $233 before breaking topside, then this is a falling price channel. Since IBB hasn't re-visited a swing low in more than 2 years, it isn't likely to get to $233 before reversing; however, if IBB should take out $233 on a closing basis, then this is new behavior and one would expect other swing lows to fail as well. Important things to watch in the next few days will be the reaction of IBB should it hit the 50MA and the CCI and the 14,3,3 Sto. The CCI is oversold now but it has become more so in the past so I would expect that to happen this time. The Sto is not quite oversold but could easily become so on Friday. When these get oversold, then IBB should bounce because that is what has happened in the past. If IBB does in fact bounce then it should clear the upper channel line of the bull flag formation and off it goes again, but if IBB gets oversold and does not bounce out of the Bull Flag, then this again would be new behavior and this would lead me to believe that IBB has more work to do on the downside. IMHO, of course, and subject to change without notice. GL
NASDAQ:IBB
by CurtisM
IBB, Anatomy of a 'sell' signal 03/01/2014The Nasdaq Biotechnology Index consists of 122 stocks and out of those 122 only 6 closed green on Friday, 02/28/2014. 9 of those 122 stocks are also in the $NDX/QQQ where they collectively make up 12% of that index, slightly more than AAPL. From the beginning of 2013 until the most recent closing high, IBB has run up 100% and has been an important factor in the $COMPQ and $NDX rallies. Weakness in this sector is certain to impact $COMPQ and $NDX by, at minimum, stalling the rallies in these two indexes or perhaps pressuring these two indexes lower. IBB has become extended above it's near term MA's and as you can see on the chart, when it pulls back, it likes to visit the area around the 50MA. Because the .764 Fib retrace is also right where the 50MA is, then this seems like a logical target area. A failure to hold at the 50MA would probably mean a test of the last swing low at 233. However, in the last year, IBB hasn't revisited a swing low support area so, unless something has changed, it isn't likely to revisit or take out the most recent swing low There were all kinds of warnings on the chart before the most recent drop, the most important, IMHO, being the RSI negative divergence. For all I know, IBB may reverse on Monday but if it doesn't then watch for the RSI to drop to 50 as that is where it has turned recently. If the RSI doesn't stop there, then watch for a drop to 30 as an oversold signal. At the same time, watch the CCI for a drop below -100 and then a reversal and rise back above -100 as that is generally a good signal that the decline is either over or soon will be. The point of this exercise is that the $SOX index, with several shared components in the $COMPQ & $NDX, has been flat for the last 7 sessions, and now you have IBB exhibiting weakness. The $COMPQ & $NDX under performed the other major indexes this past week and they have been the drivers behind this rally since day one but they're not going to be able to maintain these important leadership roles if sub-sectors begin to flounder. Added Sunday, 03/02/2014: I just read that 7 of the top 10 stocks in the Russel 2000, $RUT/IWM are biotech stocks. GL
NASDAQ:IBB
by CurtisM
1
Biotech: An end to a bubble?Biotech has had an insane run up the last year, and specifically the last 14-15 months where it broke out of its 30wma channel and relative consolidation. At the moment, almost daily we are seeing new bioteches with all sorts of "ideas" no revenues, high valuations come into the market. this is similar to tech booms in my eyes, although not yet as overextended because the general public is not as invested in the stock market as it was back in 1998-2000. Regardless I believe this run up will end. will it be now? The hardest part about bubble is calling the top, and unfortunately timing is everything, All I can do is take high reward/ low risk opportunities and take tight tops on insane overextensions. In this most recent rally again healthcare/biotechs was a considerable rallier and in the lead w/ utilities, although biotechs have probably had a much crazier overextension. I think we might be coming near the end, but as always, the last push is always the craziest as everyone goes all in. regardless it is usually at around this spot 14-18 months where bubbles in stock market sectors begin their decline or last push, so keep this on watch for low risk entries and as always have VERY tight stoploss when playing bottoms and tops. remeber you can always get back in once the situation favors you Conclusion: Monthly RSi is over 87, weekly rsi is starting another breakout and etf is breaking out of upper bollinger band. A small short position could be taken here using a VERY tight stop loss with inverse 2x etf BIS. Preferably I would wait for one full candle over bollinger, w/ open and close over upper bollinger band on weekly. I
NASDAQ:IBBShort
by AlexPrather
1