Welcome back for another Top Down Trade of the Week.
This is a classic leadership scan.
We start with the best sectors, then drill into the subgroups. We pick one, and then take a look at the top stocks in it.
This week’s standout is Healthcare, which climbed three spots to take the top position in our sector rankings.
Participation is beginning to broaden as the Healthcare Sector SPDR $XLV is on the cusp of resolving higher from a short-term base.
Here’s a look at our overall industry rankings, which show Biotechnology breaking into the top 20.
When Biotech is working, the industry is always home to some of the biggest winners. And right now, this is the strongest subgroup in Healthcare, the right place to be fishing to express a bullish thesis on the sector.
Below are the Top 10 names in the Biotechnology subsector, ranked by relative strength.
This week’s spotlight stock is Nuvation Bio $NUVB:
NUVB is on the verge of completing a bearish-to-bullish reversal pattern as price presses up against the upper bounds of its base, jumping 30% this week.
Adding fuel to the move, the stock has reclaimed the VWAP anchored to its IPO — meaning the average investor is finally back in the green and buyers are in control for the first time ever.
With short interest near 30% and more than eleven days to cover, the stage is set for a powerful squeeze.
This is a clean trend reversal setup with risk/reward skewed firmly to the upside.
If and when price breaks above 4, we like it long with an initial target of 7.60. Our secondary objective is 15 over longer timeframes.
Our team at ASC is constantly running these kinds of top-down scans. If you want access to our research and the trade ideas that come out of it, join us today—risk free.
