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It is Time to Buy Beaten Down Healthcare Stocks

September 29 , 2015

Healthcare related sectors have been the hardest hit recently. XBI, IBB, CURE, etc were some of them. Biotech sector is the one seen the biggest decline among all healthcare related sectors and XBI is such an ETF which loaded with small cap biotech stocks.

Two 3xleveraged ETFs LABU/LABD related with XBI made big moves last month. While LABD gained over 100%, LABU lost more than half of its value.

LABD - This is a 3xleveraged ETF, 3xbear S&P Biotech shares (or XBI). It has been up seven days in a row and Its price has doubled during this time span from under $30 to close at $63.90 today.

LABU - It is another 3xleveraged ETF, 3xbull S&P biotech shares. Its price declined 7 days in a row and has lost more than half of its value during the same time span from $37 to close at $14.73 today. Further more, its price has lost over 75% of its value in the last two months alone.

But when blood is on the street, it is time to buy. LABD daily chart has given a clear overbought signal. Its RSI at 76.42 showed a SELL. On the other hand, LABU gives a clear BUY signal. We will buy LABU tomorrow and believe that we will see at least 20% - 30% short term rebound. It is also possible to see a 50% bounce back.

That is, our low target will be $17.67 . - $19.14 and high target could be up to $22.09 iin the next few weeks.

Another drop is possible after the bounce. Be prepared.



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