The Biotech Boogie

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:

Love it when the plan comes together

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.

Known to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

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