Some people use XBI (weekly, daily) to indicate risk-on/off since biotech stocks are generally riskier investments. Going back to the pandemic drop in 2020 (and before), you will see 87 as a resistance area. The market gapped over this when the recovery (market rally) picked up steam. Now here 86-87 is again at the top of a supply zone.
Based on other indicators as well, a pullback may occur here before further upside. Selling and/or put buying may occur before FOMC next week.
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Selling in supply zone here - if price goes to 80, then lower - definitely bodes ill for NDX/QQQ. Interestingly, when you look at a weekly chart, note price has already gone down to 2020 lows and for the past two weeks is holding above the 20sma while RSI is near 50. I am watching to see if price heads towards 70 one more time before a real move up, or if it holds over 79-80 and continues rising.
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Yesterday XBI retested daily range lows and closed over 10ema. Today price is moving up again. Price should get back to 84 and move higher to 87, 90, 92. This may be leading a rise in markets.
Bear market rallies are designed to suck people in and make them think there is a near term bottom in before the next leg down. We haven't experienced any of the ramifications of the slowdown that is coming due to all the obvious factors at play, everything bubbles, stimulus, money printing, global recession/ depression/ currencies collapsing, defaults, layoffs by the tens of millions, that is all to come. We are no where near a bottom until all that plays out.
OptionsRising
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@ShortSeller76, I agree with you. Timeframe is the key here, and I focus on day trades or swings that usually last less than 3 weeks. See the CVNA example. Regardless of bankruptcy, I have been watching the chart and last week I bought 24 strike calls that I closed today.
ShortSeller76
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@OptionsRising yes good call but market went up too all ships rise with tide. I’ve learned not to buy calls on money losing companies been burnt many times doesn’t matter how oversold on charts not for me but great it worked out for you!!