Back in 2011 I had written this article about DOJI at the TOP and what it means for parabolic movers.
http://bigbullandbigbear.blogspot.com/2011/05/doji-at-top-pattern-to-burn-in-your.html
We have Biotech sector going parabolic after the buyout of Intercept Pharma where the stock gapped up massive $250 dollars on the day.
Due the this there has been a massive buying in all type of biotech stocks which has made the biotech ETF surge exponentially higher.
Looking more closely to the chart, we do have a Doji at the top followed by a red doji/ / hammer type of candle. ( I would have preferred a Red candle DOJI instead of a green one but nevertheless this setup here offers a good risk reward.
The critical level here would be 250 area. if that gets taken out then this ETF can easily tank down to 200 levels.
There are multiple ways to play the short.
One simple way would be to short the ETF with the Buy Stop a the top the that DOJI candle.
Other ways to play them would be with options.
My friend Steve Place has a good way to explaining this on his blog
http://investingwithoptions.com/blog/2013/12/30/the-foolproof-way-to-find-a-blowoff-top-using-options/
http://bigbullandbigbear.blogspot.com/2011/05/doji-at-top-pattern-to-burn-in-your.html
We have Biotech sector going parabolic after the buyout of Intercept Pharma where the stock gapped up massive $250 dollars on the day.
Due the this there has been a massive buying in all type of biotech stocks which has made the biotech ETF surge exponentially higher.
Looking more closely to the chart, we do have a Doji at the top followed by a red doji/ / hammer type of candle. ( I would have preferred a Red candle DOJI instead of a green one but nevertheless this setup here offers a good risk reward.
The critical level here would be 250 area. if that gets taken out then this ETF can easily tank down to 200 levels.
There are multiple ways to play the short.
One simple way would be to short the ETF with the Buy Stop a the top the that DOJI candle.
Other ways to play them would be with options.
My friend Steve Place has a good way to explaining this on his blog
http://investingwithoptions.com/blog/2013/12/30/the-foolproof-way-to-find-a-blowoff-top-using-options/
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