Hello TheoTrader,
The second-largest sector of the S&P 500 came back to life last week. If you didn’t know already, that sector is healthcare.
It’s effectively been on life-support since the April lows, and it’s not surprising when you consider so many of the negative headlines circulating within the industry.
But is this turning out to be a classical contrarian signal? To be honest with you, I’m not even that excited about healthcare’s rebound, although it would definitely help technology, which has been leading, carry this market higher.
There’s a smaller sector within healthcare, however, that has my attention…
Biotech’s Big Bid
Every now and then, I like to remind people, “When in doubt, zoom out.”
This applies immensely to biotech right now. Have a look at the monthly chart of the index below.
This sector is literally now just coming back to life. The sector thrives on lower interest rates, and given the condition of the jobs market, the Fed’s going to keep cutting until inflation rears its ugly head again.
This creates a prime environment for biotech, which is so exciting, because we’re talking stocks that love to experience 30% or 40% moves in short periods of time.
I’ll be sharing my favorite setups in the sector over in the Trinity Trade.
See you there,
Gianni Di Poce
THEOTrade
