I’m always looking for the next potential market leader. Anyone paying even the slightest bit of attention knows that semiconductors and technology have been the main drivers of this bull market… so far.
But for any bull market to sustain itself, there needs to be expanding participation – this market can’t just be a one-trick pony. Lately, I’ve started talking about one particular sector more, and it falls under the umbrella of an even broader, very important sector: Healthcare.
Healthcare is the second-largest sector in the S&P 500 behind technology. My thesis here is that there’s one sub-sector within the healthcare umbrella that could provide some huge breakout opportunities. Here’s why I think so…
This Is One Very Impressive Chart
Have a look at this long-term monthly chart of the NYSE Biotech Index.
As you can see, biotech was a leading sector in the 2010s. In fact, during much of that time, I was still working in the financial services industry. I remember it being a significant allocation in client portfolios. But if you look at where prices are, relative to that 2015 high, we’re only marginally above those levels.
Does that seem right to you? An innovative sector like biotech moving only marginally higher nine years later? Nine years which have seen massive drug breakthroughs, I’d point out. There’s a huge price base in this chart, and where I come from, we like to say, “The bigger the base, the higher the space.”
I’ll be keeping you posted on biotech developments and rest assured that I’m picking off strong momentum plays in this space. I’ll have a great way to share those with you shortly. Talk soon…
