LABU a 3x leveraged EFT in the biotechnology sector has diverse holdings.
My thesis is that biotechnology and healthcare are relatively unhinged from the broader general market.
Here I chart LABU / QQQ ratio to determine relative strength.
On this weekly chart, the ratio and so relative strength are at more than a 52 week low.
The MACD indicator shows the MACD and signal line ascending and below the histogram.;
moreover the MACD in green is running above the signal line. This favors a trend reversal.
All in all, this seems to be a setup for a long swing trade or investment.
I will take a trade in a call option with a strike 50% higher than current price
as I see a potential for a large percentage gain for LABU. The diversity of the ETF
will serve to mitigate some of the risk. A stop loss will be 1% below current price
with an expectation of more than a 50 % return in the remainder of the calendar
year but far more in the case of the call option scenario
My thesis is that biotechnology and healthcare are relatively unhinged from the broader general market.
Here I chart LABU / QQQ ratio to determine relative strength.
On this weekly chart, the ratio and so relative strength are at more than a 52 week low.
The MACD indicator shows the MACD and signal line ascending and below the histogram.;
moreover the MACD in green is running above the signal line. This favors a trend reversal.
All in all, this seems to be a setup for a long swing trade or investment.
I will take a trade in a call option with a strike 50% higher than current price
as I see a potential for a large percentage gain for LABU. The diversity of the ETF
will serve to mitigate some of the risk. A stop loss will be 1% below current price
with an expectation of more than a 50 % return in the remainder of the calendar
year but far more in the case of the call option scenario