Less than a month ago $IBB was putting in a wonderful head and shoulders topping pattern. Patterns have been working out quite well in 2015, especially the ones pointing to downside.
More on the here:
I also covered the looming top in $IBB a few times, most notably here:
I think we are setting up again for Biotech. It's been a wonderful move off the crash lows.
That $360 level was strong support. And when it broke it took prices down with it. We are now coming back to that $360 level. Guess what? It's going to be nasty resistance, and I'm not so sure it will be broken. Also as the price fails at $360, we are also looking at a terrific bear flag pointing to more downside ahead.
I'll be looking for some PUTs into this move.
Trades I am looking at.
This weeks: $IBB $350 puts $2.75 or $GILD $110 puts for $1.10 or $CELG $123 weekly puts $1.40
I think this move will start to come to fruition this week. The beginning of $IBB's break lower started on a Thursday and carried though to the middle of the following week. That is the tyoe of scenario I'll be looking for if I enter any of these positions.
Will keep the action posted in the chat room if I get into any of these trades.
Finally the reason I included $GILD and $CELG is they each make up over 8% of $IBB. You ma find the option pricing for them a little more friendly, as well as the spreads on the options.