LABU, my all in bet with a stop, of course.
I honestly cannot find a better opportunity in the market than LABU currently. The ETF is XBI*3, which has demonstrated some major cyclicality and is currently selling below it's 2015 highs.
My analysis is as follows:
Record volumes on LABU specifically, but more or less
XBI too. This implies we've hit a level of importance.
It's quite clearly been consolidating for the past week;
a sign that if we've bottomed out and that the strongest selling is in the past.
It's normal for LABU to experience pull backs
lasting, about 1 month, 3 months or whatever.
We are currently 360 days into a -50% pullback on XBI and
30 days into another significant pullback now.
The most recent leg down was clearly in relation to the entire
market selloff, XBI was one of the sectors that was hardest
hit during the price action.
My view is as follows, I used the same logic during covid when I split my account between OVV and CCR:
If conditions return to that of December, which were markedly poor, LABU will probably
sell for 40, if conditions returned to October, 60 is entirely possible.
Both possibilities are quite clearly in the cards for this year, and it looks like the market has already begun
to turn around.
My personal bias is that this sector is probably undervalued, because the firms
that represent it are almost certainly worth more than what they sold for in 2015 (although I havent done any work on any of them)
and my sub-grade technical analysis suggest that we've possibly hit a bottom, and you can find a great risk to reward trade by owning this security.
At this time, with the price at 17.5~ I am 100% in LABU but I have the stop at 16.5. So my expected risk to reward is 10-1, which is unheard of.
TL:DR
XBI has fallen a lot.
Its been down for a while.
Volumes have hit a record in it's parent ETF, XBI
If conditions return to December, I'll make 100%. If I'm wrong, I'll lose 7~%.
Naturally, I have a strong conviction in the possibilities with this type of trade. I would strongly advise that you don't follow it. Despite the underlying being an ETF, it's clearly a high-risk high-reward type of deal.
My analysis is as follows:
Record volumes on LABU specifically, but more or less
XBI too. This implies we've hit a level of importance.
It's quite clearly been consolidating for the past week;
a sign that if we've bottomed out and that the strongest selling is in the past.
It's normal for LABU to experience pull backs
lasting, about 1 month, 3 months or whatever.
We are currently 360 days into a -50% pullback on XBI and
30 days into another significant pullback now.
The most recent leg down was clearly in relation to the entire
market selloff, XBI was one of the sectors that was hardest
hit during the price action.
My view is as follows, I used the same logic during covid when I split my account between OVV and CCR:
If conditions return to that of December, which were markedly poor, LABU will probably
sell for 40, if conditions returned to October, 60 is entirely possible.
Both possibilities are quite clearly in the cards for this year, and it looks like the market has already begun
to turn around.
My personal bias is that this sector is probably undervalued, because the firms
that represent it are almost certainly worth more than what they sold for in 2015 (although I havent done any work on any of them)
and my sub-grade technical analysis suggest that we've possibly hit a bottom, and you can find a great risk to reward trade by owning this security.
At this time, with the price at 17.5~ I am 100% in LABU but I have the stop at 16.5. So my expected risk to reward is 10-1, which is unheard of.
TL:DR
XBI has fallen a lot.
Its been down for a while.
Volumes have hit a record in it's parent ETF, XBI
If conditions return to December, I'll make 100%. If I'm wrong, I'll lose 7~%.
Naturally, I have a strong conviction in the possibilities with this type of trade. I would strongly advise that you don't follow it. Despite the underlying being an ETF, it's clearly a high-risk high-reward type of deal.
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