One Day before election – Markets bouncing – Virt.Portfolio : Add DAX & US BIOTECH ETF (2)

Buy iShares Nasdaq Biotech ETF (IBB)  at limit 253,50 USD

Permanent attacks of Hillary Clinton against the drug industry had the consequence she has been seen as the biggest threat for the sector for months. In recent months investors sold the »Rumor » of a Clinton election and made of the S&P500 Health care sector one of the worst performing sector in US : – 13% since August top and – 8,50% YTD .

This is a « Buy the News » trade in anticipation of a Clinton win  and we use here the Biotech Sub Sector which is more volatile and suffered even more than the global index : -35% since 2015 top, -27% YTD and -16% since August interim top.

The Technical rationale for this trade :

  • The Index is at 2 Year support line in the 240-250 USd range.
  • Reached oversold levels that matched 6 out 7 times in the last 5 years with excellent entry points for the mid term (see purple ellipses).
  • Divergences appear in daily MACD but no crossing up yet.
  • Index price is back to its 3 years ago price.

Stocks (17:15 CET Time) currently quotes USD 261,18 up 9,50 USD so the limit put pre market (253,50 USD) was too probably too low : I increase  a bit limit to USD 257 .  If we enter this trade SL set at below USD 230

ibb-071116

Buy  ETF Dax Daily Long 2 X at limit 218,25 ( Current @ 219 EUR) – Leverage ETF .. 2 times the dax daily performance. – ISIN DE000A0X8994.

For rationale for this trade on The Dax see the post on « Dax Technical comment »  dated November 3rd : We play here a potential bounce from major index support. Here too i was too cautious with the limit at 218,25 and i change it to 218,75 EUR (Current 219,99 EUR) .

dax-2x

 

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