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XBI LABU Bullish Pennant, Price Target Finalized

I have decided to set the price target for the recent LABU long trade at 21.50. This target is derived from the analysis discussed on XBI in the Biotech video posted earlier today as well as the fact that XBI & LABU have continued to consolidate just below the 64.50ish resistance level covered in the video. So far, that consolidation has taken the form of a bullish pennant consolidation pattern.

XBI 30 minute Oct 2nd

XBI 30 minute Oct 2nd

 

This 30-minute chart of XBI (1x SPDR S&P Biotech ETF) IS overlaid with a zoom-in shot of a 1-minute period highlighting the pattern. The projected measurement for a bullish pennant pattern is to add the length of the flagpole (dashed orange line) to the bottom of the pennant formation preceding the breakout (which, again, has yet to occur). That pattern projects to right about the 68.12 area which I mentioned as the point at which I would likely book full profits. Even if prices move below the bottom of this pattern by a relatively small margin, as they are starting to do as I type, the pennant could simply morph into a bull flag.

As I typically set my sell limit orders below the actual resistance zone, I will be closing out my LABU long bounce trade if & when XBI approaches the 68 area which should correlate to roughly 22.00 on LABU, with a price target (sell limit order around 21.50).

Should XBI fail to surmount the 64.60 level today or even if it does but fails to run as high as 68.00, I may decide to book partial profits as to reduce my triple-overnight exposure before the weekend. Unless stated otherwise, the official final & sole profit target for the LABU long will be 21.50.

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Oct 2, 2015 1:58pm|Categories: Completed Trades - Long|Tags: , |1 Comment

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