The short position in biotech is active and now has downside targets.
These updates are an example of letting the market itself determine the (trading) course of action.
Yesterday, we said that price action itself will identify the stop on the short position.
We’re using LABD (3X inverse, IBB) as the trade vehicle; not advice, not a recommendation.
Looking at the daily chart of IBB, we’ve got what appears to be a Head & Shoulders top.
Two sessions ago, the neckline was completed. Yesterday, was a counter-trend move.
If we’re in an H&S top and that neckline is penetrated, it sets up a measured move target.
Getting back to the short on LABD. Our stop is yesterday’s high in IBB which loosely corresponds to the low of LABD (approx: 17.19).
The market itself defined the stop.
Now, we’ll follow this trade to its conclusion. The plan is either to stop out or exit at the IBB lower target.
Pre-market activity, LABD trading higher at about +1.00%.
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