Category Archives: IBB

How to use Fibonacci projection

October 7, 2020 By in Biotech, IBB

There’s a lot happening in the biotech sector. 

Today, Wednesday, 10/7/20, will be a Fibonacci 144 days from the low of March 16th, this year.

If the all-time high (IBB) was reached on July 20th, Fibonacci day 89 (minus 1), then today may be a critical juncture for the sector.

The current move off the low on September 4th, could be a counter-trend move.

Using the Fibonacci projection tool … a standard addition to most chart packages, we see a possible 1:1, a-b-c projection to the 141.28-area.

Counter trend moves (a-b-c), typically have equal ‘a’ and ‘c’ waves.  The ‘b’’ wave in this case was 76.4%, of the ‘a’ wave … deeper (weaker) than normal.

It just so happens the 141.28- area of IBB also corresponds to a Fibonacci retrace of 76.4% from the 9/4/20, low. 

If IBB reaches those levels today and stalls, it’s an indication that at minimum, the market respects this area.

What happens next? 

To go short (not advice, not a recommendation) is selling into a rising market. 

Technical indicators, MACD, moving averages are all pointing up both on daily and weekly .. although weekly MACD lines are still in a bearish cross-over.

Certainly it’s the danger point. That’s what we’re looking for. 

It’s the trader’s discretion on what to do if/when IBB reaches 141.28. From this firm’s perspective, price action behavior itself at the projected level will be the arbiter.

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Biotech breakout … Will it hold?

October 6, 2020 By in Biotech, BIS, IBB

As with natural gas, UNG discussed here, IBB is also at a danger point.

Price action penetrated resistance and closed above that resistance; giving the appearance of strength.

The chart shows Fibonacci time correlations.  Biotech, IBB appears to have form and time structure.

To use Wyckoff parlance, IBB is in an up-thrust; a potential reversal condition.

It’s true that a weekly time correlation appears to be in effect as well; At least at this juncture.  However, it’s price action itself that’s the final arbiter.

If there’s a retrace below support, then a test (form the underside), we’ve got a good indication of reversal

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Biotech: Top at election?

October 4, 2020 By in Biotech, IBB 3 Comments

Biotech (IBB) is trending higher and may reach a top right during the election.

If that happens and then reverses, it may be posting a bearish MACD divergence on the weekly chart.

From the low during the week of March 20th, we see a potential Fibonacci time correlation in effect.  A pull back low occurred during the week of June 12th, a Fibonacci 13.

Interestingly, the week of November 6th, is Fibonacci Week 34.

On the sidelines for now; watching for a trade set-up.

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Amgen Higher To 290

October 1, 2020 By in AMGN, Biotech, IBB

Price action itself has negated the breakdown scenario in Amgen (AMGN).

Instead, we now have a wedge that’s forecasting a move higher. 

Using a measure move off a wedge breakout (yet to occur), we can project AMGN to the 290 area.

The expectation is the overall biotech index (IBB) will move higher as well.  If so, there’s a potential to form a bearish weekly MACD divergence if IBB makes new highs.

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Peabody (BTU) Trending Higher

September 28, 2020 By in Biotech, BIS, BTU, Coal, IBB

Those late to the game on BTU may have cashed out with losses on Friday, September 25th.

So-called ‘expert’ (buy) opinion came out on the 17th and since then BTU has declined anywhere from -8%, to -27%.

We exited our BTU long on the 18th, with a 15.5%, gain.

Now, we see BTU contacting a nascent trend-line.  There could be a trading channel formed as well.

If BTU maintains the trend, it’s rising approximately +3,000%, annualized.

At that rate, a 100% gain on a long position (not advice, not a recommendation) would take about six-weeks.

In other markets, biotech (IBB) pre-market action shows a higher open.  If that’s the case, we’ll exit (not advice, not a recommendation) the BIS position and stand aside.

Update: 9:54 a.m. EST: IBB is reversing immediately from its open. BIS position maintained (not advice, not a recommendation) at this point.

Update: 2:39 p.m. EST: BIS exit @ 31.591

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Biotech Short: Technical Discussion

September 27, 2020 By in Biotech, BIS, IBB

Short out, short in. That was the trade action for Friday, the 25th.

The pre-market update hinted price action would rise; taking out stop orders at the area shown.  IBB did just that and more.

Early in the session, within about thirty minutes it was obvious that we’re moving higher. The BIS position was exited at 33.10.

Profit on the short, held for ten days was about 6.5%.

Price action continued to rise throughout the day. Late in the session, the short was re-established via another position in BIS.

Not expected, was that IBB continued to move higher into the close of the day. 

BIS moved correspondingly lower.

The position is showing a slight loss of -1.5%.  This amount is well within risk parameters but does require that IBB opens lower and moves lower at the next session.

The chart, with an expandable version here, shows we’re at the top edge of an established trading channel. 

Force Index, upward thrust energy has declined while at the same time price action finished the day right at the axis line shown.

There’s also a Fibonacci time sequence as noted.

The expectation is for a lower open and lower action during Monday’s session.

If price action opens higher, the short-covering scenario as identified in this update, is not in effect; the short position will be closed.

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Amgen At The Edge

September 26, 2020 By in AMGN, Biotech, BIS, IBB 2 Comments

The market itself has decided the lower wedge-line is important.

Price action penetrated, then recovered, penetrated again and is now testing the underside.

This oscillation about the line validates its existence and confirms its importance.

AMGN is at the danger point.  Price action can go either way.

Higher, and the wedge has been negated.  Lower and we may have a strategic, long-term reversal.

Separately, the short position via BIS at the trader’s discretion was exited early during Friday’s session.

When it’s obvious, we did not wait around for the stop.

The total profit on the short, held for just ten days, was about four-weeks pay for the typical American worker.

Why list it in those terms? 

With at least 30% of the population out of work and no job in sight, would it not make sense to show how proper research, experience and training may replace some of the lost income?

Getting back to the biotech short position; Later in the session, as IBB was rising, BIS declining, the short was re-established.

More on that entry is planned for tomorrow’s discussion.

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Biotech, Short Stop

September 25, 2020 By in Biotech, BIS, IBB 2 Comments

It’s about 20-minutes before the open.

For those monitoring the short trade in biotech (IBB), the stop has been moved (not advice, not a recommendation) to the area around IBB, 133.11.

This is the middle of the trading range from September 23rd.

There may be orders hiding right around IBB 132.00 – 132.40 and the market could attempt to search these out.

We’ll see.

Annotated chart below:

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Amgen: Strategic Reversal

September 24, 2020 By in AMGN, Biotech, IBB 1 Comment

Amgen (AMGN) was covered in the last update as having a wedge breakout to the downside. 

Price action then promptly reversed back into the wedge, giving the equity a new lease on life.

At least, that’s the way it looked at the time.

If we pull out to one time frame higher … the weekly, and look at AMGN, the reversal set-up and possible channel(s) are clear.

The terminating, rising wedge is there.  However, we can see several trend-line symmetries.

Taking the solid blue trend-line (right side) and bringing it backward (dashed lines), sometimes referred to as “reverse trend-line”, there’s symmetry in the AMGN set-up.

We may be witnessing the strategic reversal of AMGN which has already developed a massive trading channel.

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Trending: Biotech

September 24, 2020 By in Biotech, BIS, Gold & Silver, IBB, SLV

Today’s action may be in a trading channel.

It’s a Fibonacci eight days from the low of September 4th, to the top on the 16th.

That time correlation, along with the channel hits, help to provide validity to the set-up.

Our short position in the sector has not changed appreciably.  There was a slight backing off yesterday, by reducing the size about one-percent.

However, during today’s action as IBB was making intraday highs (BIS making lows), the short position was increased, via BIS.

In any event, we have a hard stop at the day’s high, IBB 134.85, which is approximately 31.46, on BIS:  Not financial advice, not a recommendation.

As of this post, 7:00 p.m., EST, the S&P 500 futures are trading down about -0.50%, giving the inference that downside action will continue at the next session.

Silver futures have dropped another 4.5% – 5%. Price action’s heading straight down.  Nearest chart support for the SIZ20 (December) contract is around 20.00.

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.