Late in the trading day as the market tanked, news hit that there might be a buyout of Biogen Inc (NASDAQ:BIIB) by Merck & Co., Inc. (NYSE:MRK) or Allergan plc Ordinary Shares (NYSE:AGN). This caused the biotech ETF IBB to jump and saved the stock market from a large decline.
Yesterday, I had posted how the max move on IBB was $297-$300. Today, the high on the biotech ETF was $299.00, smack in the middle of the sell range. This now tells me it is safe to inch into a short on the IBB or buy puts. Most investors will be too scared considering the potential buyout news, but if you look at history, the end of moves come on euphoria just like this.
Yesterday, I had posted how the max move on IBB was $297-$300. Today, the high on the biotech ETF was $299.00, smack in the middle of the sell range. This now tells me it is safe to inch into a short on the IBB or buy puts. Most investors will be too scared considering the potential buyout news, but if you look at history, the end of moves come on euphoria just like this.
I am shorting IBB, here is why...
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