As XBI sits right now, we either see nice upside or a crack in the chart to the downside. Big earnings names coming up but XBI is now sitting below the 20MA which would be a short signal for me.
XBI getting ready for a move after some super healthy consolidation, bulls need to see a break of the 101.05/101.06 double top and a break of RSI resistance for room to the upside. Earnings from some larger names will like help XBI to pick a direction soon. LABD and LABU will be on my radar this week. I will be much more likely to play a break if overall market...
... for a 1.00/contract credit.
Metrics:
Probability of Profit: 57%
Max Profit: $100/contract
Max Loss: $200/contract
Break Evens: 79.00/94.00
Delta: -.28
Notes: Will shoot to take profit at 50% max ... .
A choppy market since the February market turmoil, but I think we are back on track. Longterm we are still locked in a bullish play, and I think we may have completed a 4thwave play on the internal wave count and are now making moves to shape up the final 5th-wave.
Here is the longterm view so far:
XBI maintained it's daily higher low by a small margin on Thursday which provided a great bottom fishing play as SPY hourly was very oversold. Daily downtrend line provided a perfect LABU exit, and now waiting for a break of 88.65 and even more key 89.16 to enter a long swing (if SPY breaks bullish with it), or a break down of 85.06 for a short swing - if SPY...
Later in the week, we kick off earnings season with a trio of financials: JPM, C, and WFC,* all of which announce on Friday before market open.
Generally speaking, I haven't played a lot of financials in the past, since their background implied volatility never seems to bump up significantly enough. Here, however, with JPM's implied at 32, C's at 33, and WFC's...
Lately we've been seeing out performance vs SPX in tech XLK, financials XLF and consumer discretionary XLY. I think we have no reason not to expect strength in XBI biotech to pick up some steam in the weeks to come.
