Don't Ignore This Chart!

After Long Basing Period, Pharmas Look To Break Out

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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

Tom Bowley
About the author: is the Chief Market Strategist at EarningsBeats.com, where he provides stock market education, guidance, and trading strategies using a unique combination of technical, fundamental, and historical analysis. Tom provides EarningsBeats.com members with four portfolios (Model, Aggressive, Income, and Value), all designed to beat the benchmark S&P 500, and a revolving Watch List of hundreds of companies reporting strong quarterly earnings (must beat both revenue and EPS estimates) and exhibiting technical strength as well. These companies comprise EarningsBeats' annotated Strong Earnings ChartList (SECL), from which Tom trades exclusively. Tom writes a Daily Market Report (DMR) for members to include an executive summary, market outlook, sector/industry watch, and trading ideas. Learn More
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