Danger Point … Print, Danger Point … Close
First, biotech SPBIO, ‘printed’ into the danger point.
The next day (yesterday), it ‘closed’ into the same region.
The charts below show where things left off at that close.
As is frequently done, farther down, we’re going to invert the chart to show price action similar to the leveraged inverse fund LABD.
Biotech SPBIO ($SPSIBI) Daily Close
Adding zoom for more detail
Next, we invert the same chart to show how it looks going short via LABD (not advice, not a recommendation).
Biotech SPBIO ($SPSIBI) Daily Close … Inverted
We can see that price action has been in a similar set-up before; just prior to a significant decline (non-inverted).
Obviously, Monday’s print into the danger point was taken as the set-up for a reversal. That reversal appeared to be taking hold based on that day’s price action.
Yesterday, reversed the reversal but then wound-up printing and closing into a danger point; an up-thrust condition on the standard chart and a spring condition when looking at it on the inverted scale.
As was done in prior action, the position size in LABD, was reduced as price retreated (not advice, not a recommendation).
However, the position was not exited entirely.
Pre-market action has LABD, trading higher about 1-point or 2.0%. This behavior is consistent with a potential reversal.
Today’s close is the important part.
Higher for LABD, and we’re in a potential reversal for a significant move; lower and it’s time to exit completely and stand aside (not advice, not a recommendation).
Charts by StockCharts
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The Danger Point®, trade mark: No. 6,505,279