Going to do something a little different today. I saw an opportunity intra-day to play XBI which is the S&P Biotech sector. Full disclosure: I am long XBI for a swing trade at the moment and I am near my stop loss. This was a good opportunity to play a shorter time frame trade and minimize the damage if I do get stopped out of my swing position.
The key is not to add this trade to my swing trade if price had of gone against me. The two should remain separate and I don’t want to compound the problem by adding more shares to a losing trade (averaging down).
The setup for XBI is still dislocated and cheap and the daily chart has only gotten more oversold. Leaving XBI ripe for a good reversal intra-day. I call this a “Hit and Run” trade when you have two wide range bars with volume the selling pressure can’t continue in the short term and a playable intra-day reversal can be a very good play….
Take a moment and look at the 60 minute and 15 minute times frames for XBI and you will see they were all in alignment. Then it’s a matter of looking for a good entry on the 5 min or 2 min chart.
Here’s the trade details:
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