Daily Market Report - Friday, November 22, 2019
Special Note
We just finished our first mini-series educational event leading up to Market Vision 2020, our first online conference to be held Saturday, January 4, 2020. Mary Ellen McGonagle, President of MEM Research, did a fantastic job defining her principles and strategies before deciding to buy a stock. All of our mini-series events are FREE to anyone signing up for the Market Vision 2020 newsletter (which is also free). It's a way for interested folks to learn more about the speakers for our big conference in January. Early feedback from the event has been awesome!
Anyhow, I'll need to be brief for today's DMR, but we'll return back to our normal report on Monday. In this morning's Trading Places blog, I discussed how the defense industry ($DJUSDN) emerged as a leader back in April 2019 and how it's produced returns greater than the S&P 500 since that time. I also mentioned two other industry groups that are showing the same signals right now and offered to send interested readers this information. Before I do that, however, I want to make sure all of our EarningsBeats.com members get it first. So here goes:
Health care providers ($DJUSHP)
I love the sudden surge in relative strength here and expect that it will lead to further strength down the road:
Here are the 12 health care provider stocks that are currently on our Strong Earnings ChartList (in SCTR order):
From this list, it's hard to argue with DVA, which blew out revenue and earnings estimates recently and was rewarded handsomely by the market:
DVA is a leading stock within an emerging industry group. That can be an excellent combo.
Biotechnology ($DJUSBT)
As EarningsBeats.com members know, I've been high on biotech now for several weeks and have been suggesting several individual stocks for consideration. It's a volatile group, so please be sure you're comfortable with the inherent risks. First, let's look at the DJUSBT chart:
Both the absolute and relative price charts are seeing downtrends broken and relative momentum is surging. We have several biotechs that are currently among our Strong Earnings ChartList and here they are (again in SCTR order):
I featured AMGN and VRTX in my Income and Model portfolios and took a shot with UTHR in our Value portfolio, so clearly I'm a fan of those three. But I've also discussed Regeneron Pharma (REGN) with members in the past. I really love the improving volume trends and "character change" on its chart:
The blue circles here illustrate what I mean by "character change". It used to be a laggard among biotech peers and the benchmark S&P 500. Now it's becoming a leader. (Disclosure: I own shares of REGN)
Hopefully, this helps to illustrate how I combine an emerging industry group, our Strong Earnings ChartList and relative strength to identify potential new leaders in the next phase of the current bull market.
Happy trading!
Tom