As we've seen, one of the most powerful advantages of my proprietary "Best in Breed" system is that it not only finds hard-charging companies, but entire "under-loved" sectors on the verge of explosive gains as well.
The BiB screen flashed healthcare for yesterday, and I sent everyone a note to let them know to dive in.
But the BiB's not done - not by a long shot.
There's still lots of upside opportunity here, in these two specific buys...
Eli Lilly and Co. (NYSE: LLY), which has a 2.5% weighting in the XLV ETF I showed you yesterday, is looking really good right now.
Lilly made the newswires this morning, announcing that it was scrapping late-stage trials of an experimental Alzheimer's drug they were co-developing with AstraZeneca Plc. because it wasn't meeting treatment goals.
Yet the stock has hardly suffered, trading near breakeven in early afternoon trading.
Renegade Investment Expert: "It's time to double down - or even triple down - on your cannabis investments!" Read more...
Since dipping to a three-year low on Feb. 9, Lilly has gained an impressive 16%, while the XLV has managed a 7% advance. The move has the stock trading above its 50-day and 200-day moving averages, which are both pointed higher.
What's more, these trendlines are poised to form a bullish "golden cross" in which the 50-day moves above the 200-day. The last time that happened was in February 2017, in the middle of a monster 35% rally that spanned five months.
While on the low side, short interest increased 20% last month, indicating that there could be more potential for a short squeeze should the current rally continue.
Taking a longer-term view, the stock has gained ground for four straight months after bouncing off its 50-month moving average, which provided perfect support in late 2016. The last time Lilly closed a month below this trendline was in late 2011.
NINE LITTLE WORDS that could make you up to $1 million richer this election year. Click here...
With all signals pointing toward more upside, I'm targeting a move to $90, just above the October/December highs. Such a move could yield a double by playing the Aug. 17, 2018, $85 call.
Next on our Best in Breed healthcare list is Express Scripts Holding Co. (Nasdaq: ESRX), a St. Louis-based pharmacy-benefits management company. Express Scripts comprises 1.4% of XLV.
Like Lilly, Express Scripts has more than doubled the performance of XLV off the February bottom, rising around 15%. More recently, the stock has advanced 18% in the past five weeks, using the 200-day moving average for support.
Note in the chart that the 50-day is now riding higher after a two-month slide. The last time the 50-day turned higher was in December, as Express Scripts was in the beginning stages of a two-month rally that covered more than 35%.
As with Lilly, Express Scripts short interest is on the low side. But the number of shorted shares spiked 24% in the latest reporting period after a yearlong decline.
Finally, analysts are cool toward Express Scripts despite its recent chart success. Just seven of 20 covering analysts rate Express Scripts a "Buy," a configuration that should yield upgrades as the stock continues its advance.
My intermediate-term target for Express Scripts is the two-year high at $85, reached in March. You can leverage this expected move with the Aug. 17, 2018, $80 call.
Best in Breed has identified other under-the-radar sectors that you should have on your watch list. Stay tuned for more.
Last Wednesday, the Night Trader infiltrated the markets at 9:30 p.m. The next time he checked his account on Friday, his entire portfolio went up 83%.
He then spent the weekend at a five-star hotel. And on Monday, he saw an additional 102% total gain in his account.
That's 185% total gains in two trading days (all without using a single option).
Once you see how the Night Trader makes money, your life will never be the same again. Go here now.
Follow Money Morning on Facebook, Twitter, and LinkedIn.
[mmpazkzone name="end-story-hostage" network="9794" site="307044" id="138536" type="4"]
