chartwatchers
Long

LABU - Rally must go on

AMEX:XBI   SPDR S&P BIOTECH ETF
1841 42 27
It was a bit early for this pullback. I was quite sure that the oil             rally will push up S&P             to new highs - it didn't happen though.
It's too early for LABU             and XBI             to print any scary correction now. We are tagging the 20 EMA in XBI             and that might be the end of this pullback both in LABU             and XBI             .

If oil             continues its run - and I think it will - that will be oil             on S&P's fire.
That could give a push to the biotech sector as well.
Hopefully Hillary doesn't attack biotech again in the following weeks so we can finish this daily cycle with great gains.

Comment: Today we might start a good bounce in LABU. It's a possible good entry or adding point...
Thanks Arpi! Seems though the American politicians will be attacking Wells Fargo more than Epi-pens this week.
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I might have to respectfully disagree on this one Arpi :) We could see a bounce tomorrow but I think LABU has more downside up ahead.. My Daily RSI/TSI indicator is super bearish and pretty accurate. Also, LABU was ripe for a correction after putting in a double top with clear divergence in place on a 4 hour chart.. If anyone is looking to add to a current position, I would (at the very least) wait until LABU tags the trendline which should coincide with the 50DMA and the 62% Fib Retracement. XBI is in the same boat!

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Nightstar Nightstar
Beautiful buy signal on LABD..! I got in @16 and 17. We should tag Resistance @20. Or I could be totally wrong haha!

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toothless Nightstar
I think you're on to something, but instead I reduced shares between $52-54 and just waiting to add back again if this correction continues. The timing to short XBI looks very difficult.
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bertcoin PRO toothless
Agree with Arpi and @toothless on this one. I actually sold all my LABU at $54 to go play in Arpi's oil patch. But I'm going to start re-loading. Maybe dollar cost average in over the next few days. The 20EMA tag on XBI coincides perfectly with the .382 fib (and also the trend line in a couple days) and the 50EMA coincides with the .618. It's still an underlying bull breakout out of a long consolidation. 24 days into a 34 to 50 day cycle where the next cycle low should be higher than right here. Talking myself into it... !

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Nightstar bertcoin
LABU is oversold on the hourly so we should get a bounce tomorrow but I would be very cautious on this one Bertcoin.. LABU is very volatile and doesn't always play by the rules as far as cycle analysis is concerned. It could be putting in a half cycle low for all we know. Also, notice your RSI is very bearish and has yet to reach oversold levels on a Daily chart.

One last thing.. Your Trendline (the red dotted line) cannot cut through candles! That's a big no-no. Only wicks but not the actual body of the candle.

Let's see what happens shall we? :)
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toothless Nightstar
Agreed. I think we'll dip a little more, so I'd rather wait on the sidelines for the best entry! Thanks for sharing!
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bertcoin PRO Nightstar
The trend line is from DCL to DCL (red circle to red circle). Subsequent days may cut through the extended trend line, no? I've been taught never to move a trend line once established from low to low or high to high. That's how you find breakouts and test backs. Is that reasonably correct?
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Nightstar bertcoin
I can't say that I've ever heard of it done that way but then again.. if it works for you then who am I to critique?
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USSRandolph Nightstar
I agree with your assessment of LABU/LABD. I see the same using stochastic so I am wondering how you would compare and contrast your RSI/TSI indicator with stochastic. Thanks in advance
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Nightstar USSRandolph
I like using a slow stochastic when studying a Day Chart.. I find it a little more reliable and it works well in conjunction with my RSI/TSI. In the case of LABU, I would like it to reach oversold levels first before considering buying again and would love it even more if there was divergence on a 4 hour chart. That being said, the others are right.. momentum is on the upside and we may not get that chance. Any downside movement should be limited at this point.

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I think it is tough to open any longs on stock positions at this time. The risk is too great due to stretched cycles.
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IMHO, LABU $43.80 to $44.19 is a reasonably good looking place to get back into LABU for those that might have taken some profits. (I did get back in some last night already just in case it takes off). This range is a confluence of 50EMA, .618Fib and a trend line starting on June 27 of this year. (I know I'm violating doing too much technical analysis on a 3x EFT). XBI has broken below a similar trend line (posted earlier) and the 20EMA, so around the .5 fib also matches the LABU range. Hopefully this is just a shortened daily cycle as Arpi suggests, otherwise a few more days to go....?
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(Humor in real life): On the political front, Since Cali and Illinois pulled their business from Wells Fargo already, the senior liberal senator from Illinois (my home US state which is going down the financial toilet), tried to make some waves complaining about a skin rash medicine going up a few thousand percent in price. Luckily, nobody listened to him and it only made one local news cycle. Skin rash ointment and epi-pen are not at the same level. I think he was sad he was not in this year's news because he doesn't have to run again for a couple more years so he jumped on the Pharma conspiracy train. (Maybe that's why XBI and LABU dove today.)
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Just tagged the 50 EMA on XBI which has been somewhat supportive in this rally.
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DS77 bertcoin
Beat me to it... I opened some XBI 70 calls for November 18
Going to leg in slowly to LABU if we close above the 50d which looks promising.
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DS77 DS77
Just added my first 20% position at 43.00. Time to get back in after enjoying a nice ride this summer.
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My personal update on LABU :)

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Nightstar Nightstar
My Analysis on XBI/LABU/LABD is (so far) playing out accordingly :) For those of you looking to get back in.. I would exercise a bit more patience. A correction in the S&P will either drag Biotech down a bit further or push it into a sideways consolidation.
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showerreport Nightstar
What level are you expecting?
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Nightstar showerreport
Not sure yet.. Let's see if the Market is allowed to correct without the FED stepping in to save the day.
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Nightstar Nightstar
$60 is a strong support zone for XBI and certainly a possibility. $36/$38 around the 200 DMA should provide support for LABU. Let's see what happens when we get there.. IF we get there!
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Arpi -- Thoughts on XBI/LABU ?

Is seems the bottom of this pullback is close -- perhaps XBI bottom might be 62ish (LABU 40-41ish).
Or are we heading lower. Be great to have your thoughts.
Of course the election talkers could re-focus on biotech again sending it lower....
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DS77 archie123
I am sure Apri will chime in, but I like it here near term... XBI had a nice bounce off the 50d EMA on Friday. I bought LABU and XBI calls on that move. I think the chart sets up well heading into the end of the year.
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Thanks for your comments. Yes, the 50d EMA looks like a good place to get into XBI/LABU. Looking for a nice up before the end of the year.
Appreciate you thoughts and taking time to respond.
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IMHO Looks like the magic XBI daily 100EMA (or even 200EMA as SPX is being hit hard) may again be the support for this longer term rally. I had buys set up in the green boxes, but it has blown through them, so I have again accumulated a little early. A cycle low may be due soon as well.

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Ouch! Blew through the 100EMA on XBI. Is 200 EMA support $60.72 or is the prior cycle low at $59.13 -- or will we have a significant lower low on this one? I got back in too early after very nice profits, but am confident in the long term bull on LABU. Might consider doubling down if we can find the low....
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time to buy?
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We've blown through the 200EMA. The previous cycle low ($59.13 on 8/25/16) and the 200 SMA are the next support structures to me.... I haven't seen any bottoming action other than the RSI (daily, 9) just going below 30. In XBI bull runs, it doesn't seem to stay there long. Love to see some Arpi tech at this point to help guide the get-back-into-this or double-down strategy. Politically, Hillary friend Dick Durban (D-Illinois and about the 2nd or 3rd most senior in the Senate) has been harping on prescription drug prices lately. If Hillary wins, "universal healthcare" + socialism is going to put pressure on this industry. Thank God for Ireland where Apple and all the US pharm.'s (Abbot, Baxter, etc.) are hiding!
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Notyour bertcoin
To me now it looks like a good entry point
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I'm really liking LABU at these levels no doubt about it. If XBI can hold support @$60 and if LABU can close above the 200 DMA then that bodes well for the rest of us. Look at the Stochastic/RSI indicator.. Completely exhausted and begging for people to buy!

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I am again with you in LABU. 2 reasons: 0.618 + pin bar yersterday. Looks confirmed long

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Hi Arpi,

Indicators on weekly chart point that trend might be changing. Also, I think it is time for ICL. I would watch if current week can maintain that hammer or advance. I am afraid it is just broken trendline test back.
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I'm seeing a shit load of divergences on the chart ______________ exiting LABD with a sweet ass profit (thank you), buying LABU!
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I initiated entry $LABU.Will average down if ineeded.
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I hit my stop. Guys any ideas about this trade?
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Arpi - noticed in the EurUsd post yesterday that GoldBug777 asked your thoughts on LABU. I appreciated your comments.
GoldBug777 : "Hey, what do you think of LABU? We must be getting close to the bottom now.."
chartwatchers " "We might be testing the gap. I don't suggest to enter before the elections."

Folks might appreciate more of an update if you have more to add.
Thanks for all your great posts and insight.
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bottom in place?
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RUNAWAY GAP filled. What's next?
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bertcoin PRO KholleKhokk
An election. LABU could be a super good buy after the markets digest the election.
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I was expecting a sizeable correction but this is beyond ridiculous! LABU is likely to tag support between 20/22 so I would hold off for now and wait for the SM to complete its ICL before buying or adding to any current position :)
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