XBI Wedge Breakout Exit

Chart above was captured around 11:40am ET. But at the open price gapped down then continued a little further down before reversing. Before it reversed it looked like confirmation after yesterday's large bearish engulfing pattern with a close below the 8ema. I had to get out. Sold for $2.10 per option which was a loss of $1.10.

Now I'll see how it closes for the day. Only a close above yesterday's high would be a bullish sign for today. If it closes above the 8ema but below yesterday's high, that's not a valid candlestick signal. But over a longer period, we may be forming a cup and handle pattern which would be bullish.

If it closes today under the 8ema I should probably enter short but I'd rather just watch for another day. Sorry this didn't work out. At least we contained our loss and followed our rules, which I understand is the definition of good trading.

XBI Wedge Breakout Update 2

7/26/17 9:40 you can see there was a retracement yesterday but I stayed in the trade because even though there was a bearish engulfing candle, we closed above the 8 ema. So there was no confirmation, at least the way I trade.

XBI Wedge Breakout Update 1

Trade working so far. See previous post for description.

XBI Wedge Breakout

Strong up move end of June followed by consolidation manifested as a wedge (triangle). 7/13/17 price broke out, then retraced to test the top of the wedge. Then today 7/19/17 we had a gap open after a doji yesterday. I love a break out followed by a retest and confirmation. That's what we have here, so I want to trade it.

Got Sep 80 Calls for $3.20. You can see in the chart above the daily candle went up and came back down to just below the open. This doesn't bother me. In fact, I'm ok with completely closing the gap, and even all the way back to the top of the triangle. The message is the same. As long as price doesn't close below the bottom of the triangle, I'll hold. My risk is limited to the cost of the options.

Bullish BIIB Trade Exit

This Jhook didn't form cleanly. On 7/6/17 it took a dip back down. This introduced doubt but I gave it a chance while I watched it closely. Then it started back up.

When the trade went positive I moved my stop up because of the imperfect Jhook and we're only a week away from expiration. It may just go sideways for a week. Still looks good, but you have to remember to keep your losses small.

On 7/13/17 14:58 ET the stop was hit and I got out with a small profit. Today, 7/14/17, its looking like it could continue higher, but I'm satisfied with how I handled the trade. I'd rather be out wishing I was in than in and wishing I was out.

If there was a lesson for me here, its that I chose to close a month. I chose July because it had better liquidity and I thought the target would be hit quickly, plus the cost was lower which meant less money at risk.

Bullish BIIB Trade Update

I'm still in this trade but we haven't been moving as expected. Getting out of the trade and monitoring it would be the prudent thing to do, but we're hugging the 200sma and the 8ema. The 20sma is rising up to meet price and  might supply support in a day or two. Plus a Full Moon cycle starts today which has a bullish tendency on stocks. If we close below the previous swing low I'll exit, otherwise I'll stay in a little longer.

BIIB J-hook Looking Bullish

BIIB made a strong vertical move from 6/19/17 to 6/22/17 then made close to a 50% retracement while not being able to close below the 8ema. Today, 7/5/17 it had a small gap up open after a doji. At 11:30am its looking strong and beginning to form a J-hook. Stochastics are not overbought yet. Volume is down and could be ready for a resurgence during an up leg. You can also see an inverted head and shoulders pattern with a low on 5/31/17. Plus price is above all my Moving Averages at the moment.

The thick down sloping white line is a resistance line on the weekly as you can see below. This is a potential target.

The thick white vertical line is a measured move equal to the previous up move from 6/19/17 to 6/22/17. The thin white horizontal line segment is the halfway point on the measured move. This is another potential target, and very close to the previous top on 6/23/17. This is the most conservative target.

The 127.2% Fibonacci extension is another good target at 293.26 on my chart.

If it continues up and moves as fast as the last leg, we only need a week or two to hit our target. So, to reduce cost, and increase Gamma, and mitigate the Theta time decay, I used a July 21 280/290 Vertical Call Spread. Got in at $2.75 using a limit order at the midpoint between the option spread bid and ask. This is a potential 1000:275 reward:risk, or about 3.5:1 which is good.

It will be important to close the day today above the open. If we close under the 8ema and continue down tomorrow, I should get right out and watch for a quick up move where I can get back in.

To see how my chart is set up, check out this posting:

http://jmstweets.blogspot.com/2015/04/my-standard-chart-indicators.html