Expert technical analysis of financial markets by JC Parets
Change is the only constant.
Well, Nifty 50 is really not interested in that statement because it continues to remain messy. But in this messy move, we’ve seen certain sectors outperform the others. One among the outperformers is the Pharmaceutical sector.
Are there any new breakouts in the sector constituents? A few, yes.
Let’s do a deep dive in this sector and see what comes up.
From the desk of Steve Strazza @sstrazza
At the beginning of each week, we publish performance tables for a variety of different asset classes and categories along with commentary on each.
Looking at the past helps put the future into context. In this post, we review the absolute and relative trends at play and preview some of the things we’re watching to profit in the weeks and months ahead.
The bullish picture still lies as a structural backdrop.
But now, we’re seeing mixed signals as many areas have become increasingly vulnerable in recent weeks. This is all taking place as defensive assets have found a footing for the first time in over a year, while risk-on assets approach logical levels of supply.
Recent weakness has been particularly isolated in former leadership groups, like Small-Caps and Growth-heavy areas.
But at the same time, Value and Cyclicals have continued to show resiliency as the Commodity complex suggests risk-taking behavior.
Long story short, things have become more bifurcated than they have done in a while…
From the desk of Steve Strazza @Sstrazza
Check out this week’s Momentum Report, our weekly summation of all the major indexes at a Macro, International, Sector, and Industry Group level.
By analyzing the short-term data in these reports, we get a more tactical view of the current state of markets. This information then helps us put near-term developments into the context of the big picture and provides insights regarding the structural trends at play.
Let’s jump right into it with some of the major takeaways from this week’s report:
* ASC Plus Members can access the Momentum Report by clicking the link at the bottom of this post.
From the desk of Steve Strazza @Sstrazza
Welcome to our latest “Minor Leaguers” report.
We’ve already had some great trades come out of this Small-Cap focused column since we launched it late last year and started rotating it with our flagship bottoms-up scan, “Under The Hood.“
Ultimately, to make the cut for our Minor Leagues list, you must have a market cap between $1 and $2B. There are also price and liquidity filters.
Then, we simply sort by proximity to new highs in order to focus on the best players only.
The idea is to catch the strongest names while they’re still small and have serious upside potential. If any of these stocks ever climb up the ranks to the big leagues, just imagine the returns. We’re looking at 5-10x moves just to break into large-cap land!
And what better time than now to launch a small-cap-focused column? We’ve seen robust evidence of a structural rotation down the market cap scale, suggesting a new period of outperformance from small-caps in the coming months and quarters… Maybe even years.
This column is a great way to take advantage of that trend.
Let’s dive in and check out this week’s list of the hottest stocks in the Minor Leagues.
This week we’re looking at two long setups in the Pharma sector. With Nifty Pharma breaking out above its resistance of 13,500, a couple of stocks that we’ve been tracking for quite some time now have also followed through with a breakout.
Let’s take a look at these names and track their levels going forward.
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