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Over the past four weeks, some of the biggest gains among industry groups belong to biotechs and outpatient and home care operators, followed closely by hospitals. All three medical groups have staged recoveries off February lows. The biotech group is up more than 14% over the past four weeks. The outpatient group shows a 13% gain, with hospitals up slightly less than 13%. The moves put the charts of both the outpatient and hospital groups back above their 40-week moving averages. Biotechs remain deeper in the hole, because the group suffered a much more severe sell-off — dropping 51% from July to February. Biotech’s gains have run across a broad spectrum of the group’s former leaders. Cancer drug specialist Medivation ( MDVN ) is up more than 100% from its February low and is now extended above a 48.87 buy point. Look into institutional buying in Medivation using IBD’s Stock Checkup. Ligand Pharmaceuticals ( LGND ) also helped spearhead the group’s gains. It is up 58% since Feb. 10. It cleared a double-bottom buy point of 106.08 late in March and is extended about 23%. While those stocks are extended, a few others are nearing buy areas. Emergent Biosystems ( EBS ) has only run up 29% since March. But it had a much more mild correction than most of the group. The stock is trying to break out past the 40.59 buy point of an undefined pattern. Others basing include Amgen ( AMGN ), Gilead Sciences ( GILD ) and Alexion Pharmaceuticals ( ALXN ). Amgen is near a 165.33 buy point in a cup-shaped base. The stock has climbed for six straight weeks. Gilead punched back above its 40-week average last week, up for a seventh straight week and above the midpoint in a possible six-month cup base. The much smaller Alexion remains below its 40-week line, which is trending downward. But a five-week rally has the stock climbing the right side of a long pattern. Earnings projections for this year remain fairly weak across the group. The exceptions are Medivation and Emergent, with EPS growth forecasts of 31% and 23%, respectively, for this year. Forecasts pick up for 2017, with nearly all of the advancers looking at double-digit growth estimates. For 2017, EPS growth estimates for Medivation and Ligand are above 50%. Investors with a tolerance for thinly traded stocks may want to check into China Biologic Products ( CBPO ) and Anika Threapeutics ( ANIK ). Neither of the stocks tracked the group’s sell-off last year. China Biologic is climbing the right side of a cup-shaped base. Anika is in buy range, 1% above a 47.34 flat base buy point. Earnings also look weak across the hospitals group, with the exception of Adeptus ( ADPT ). The stock scored a 14% gain this week, clearing a brief consolidation that did not qualify as a base. Earnings are expected to rise 92% this year and 46% in 2017. The stock is up 70% from a February low, but it remains 45% below its high mark from last August. Among outpatient providers, Acadia Healthcare ( ACHC ) and Amsurg ( AMSG ) each offer healthy EPS outlooks for this year. Amsurg is well up the right side of a cup base. Acadia is also basing, but it has a good deal of work yet to do. Image provided by Shutterstock . Scalper1 News
Scalper1 News