That's How I Validate Pullbacks. This strategy works 80% (ball park) from premium selling perspective. 50% on Directional move, the 50 % usually comes with less Risk / Reward ratio (less risk). Where Buying OTM (delta 30/40) is profitable. There is few more things to check before picking a strategy, most importantly the greeks.
Well, Two different time frames, I am not so happy that Biotech / Healthcare does not digest enough before every rally. The trend currently has not shifted. Even in Monthly, the Acceleration is still valid. IMO, no reasons to look for a failure trade yet. We are going through the speculative phase on Biotech, that could pretty much result in a V top. Drilling down and watching for important levels to be taken out is important.