Some Observations On Whats Working

Its hard to find anything in today’s market that is actually doing good to the longside – and when a certain industry or stock does overachieve, it doesn’t last for long. But scanning various screens, industries, and individual stocks over the past month has found a few industries and stocks that are doing quite well and worth another look. From an industry point-of-view, your biotechs, discount stores, and healthcare plans are leading the way.

From Biotech you have MYGN as the front runner posting earnings yesterday that sent the stock skyward. Other good plays are GILD and DNA. Plays such as AMGN, CELG, and GENZ haven’t quite taken off but could follow in sympathy if this industry continues forward (assuming it will under favorable Obama policies).

From the discount stores you have FDO, DLTR. You have to be careful with this industry, because the only ones that are doing good are ones that are “known” dollar stores, meaning COST, WMT, TGT, and BJ are NOT ones that we prefer. Stay away too from NDN – they are a microcap firm that doesn’t have much going for them – in fact they look like a potential short play in my opinion.

Healthcare Service Plans too looks pretty good and here you have UNH which has been on a tear of late as well as WLP, HUM, and CI (which has been on a huge run since late December).

What is the takeaway here? Find the industries that are exhibiting the most strength in this recession economy and look for good trade setups that further increase your odds of success, and you should be able to post some descent gains in a market that has been trading sideways for the better part of two months.