Sometimes the best moves higher occur after an extended period of sideways price action, or basing. We recently saw a breakout in biotechs ($DJUSBT) and that industry quickly became one of the strongest. The healthcare sector (XLV) also has been among the strongest sectors. It makes sense that other healthcare industry groups will likely break out to support the overall sector. Enter pharmaceuticals ($DJUSPR):
In my August 31st DITC blog article, I featured the autos & parts index ($DJUSAP) as it made a major breakout after an extended consolidation period and the group has raced higher nearly 5% this week. Lots of technical buyers jump in as these major breakouts occur so it'll be worth watching the pharmas to see if they join the list of industries breaking to fresh all-time highs.
Happy trading!
Tom
