Trading Places with Tom Bowley

This Group Could Be Poised For A 50% Rise Over The Next 1-2 Years

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There are two groups, when they get rolling, that you do not want to miss. The first is semiconductors ($DJUSSC), which have exploded through resistance over the past two weeks and are higher by roughly 30% since June. KLA Corp (KLAC), Teradyne (TER), Advanced Micro Devices (AMD), Lam Research (LRCX) - the list goes on and on of stocks within this space that have been surging.

The second group is biotech ($DJUSBT). For the first time since January, the DJUSBT hit a SCTR score above 70. Its price high surged to a 6 month high and it is up more than 10% over just the past month. A 20 day EMA test would be the ideal spot to enter if we see a short-term pullback:

But the bigger picture is what excites me. The DJUSBT has been consolidating for nearly two years after a meteoric rise. The 2019 downtrend line has been broken and the weekly PPO has just turned positive:

The depth of that cup is 700 points (from 2200 down to 1500). An ultimate breakout above 2200 would measure to 2900. From the current DJUSBT index value of 1996, that'd be close to a 50% move - exciting indeed!

There was a false breakout in 2018 and a false breakdown in 2019, but I believe this group could be a BIG leader in the balance of 2019 and throughout 2020. Amgen (AMGN), one of the more recognizable names in the space, just broke out last week on excellent volume and that will drive more buyers into the space. I have one name that's been beaten down and consolidating for 4 years. It has a positive divergence on its weekly chart and just reported earnings that beat estimates on both revenues and EPS. It will be my featured stock in the "3 You Must See" that I end my show with each day. That show, Trading Places LIVE, airs here on StockCharts from 9:00am to 9:30am every Tuesday and Thursday. On Mondays and Wednesdays, however, I feature the same Trading Places LIVE show at EarningsBeats.com.

If you'd like see the biotech that could be poised to explode, join me at 9:00am EST this morning using the following link:

https://zoom.us/j/248920901

If you're too late to join the show, write me at "tom@earningsbeats.com". I'll set you up for a free subscription to my EB Digest newsletter that I publish 3x per week and I'll be happy to send along the stock!

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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