I love penny stocks but here’s a setup so juicy I say forget gambling on top penny stocks, just go for the SPDR S&P Biotech ETF XBI. The chart of XBI looks pretty awesome for a swing long trade.
I spend a lot of time searching through small cap biotech stocks but I have to say, this biotech ETF chart seems to beat them all with a lot less risk too.
Biotech ETF Instead of Top Penny Stocks
Don’t get me wrong, I will keep looking for good biotech penny plays but the ETF XBI looks like a lower risk setup to play.
XBI looks like a decent setup on a Bull Flag pattern. Over the last 12 trading days, we’ve had three pocket pivot signals which is bullish.
The Effective Volume indicator shows a beautiful positive divergence between large volume orders and price action, another bullish indicator.
There is reduced volatility while prices have been consolidating but we don’t yet have a momentum squeeze setup.
The True Strength Index is starting to round out but we don’t yet have a bullish cross.
Who needs top penny stocks when a safer ETF sets up like XBI? Still, it’s biotechs so be careful and really get that good entry. A good entry is the difference between a winning and losing trade.
GO HERE TO CHART LARGE PLAYERS AND THE TWIGGS MONEY FLOW LIKE THE CHART ABOVE… AWESOME TOOL
Biotech ETF XBI Review
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Technical Rating (trend, yearly performance, relative strength, distance to 52 week high/low)
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Setup (consolidation, support/resistance, pocket pivots, large player volume)
Summary
XBI seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the S&P Biotechnology Select Industry Index derived from the biotechnology segment of a U.S. total market composite index. It generally invests substantially all, but at least 80%, of its total assets in the securities comprising the index.
Lance Jepsen
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