Dow Jones Giant UnitedHealth Among Resilient 5 Stocks in Sick Market Rally
Market rally looks sick, medical names often stand out. Isolate (PODCAST), med pace (MEDP), universal health services (uhs), Neurocrine Biosciences (NBIX) Y UnitedHealth (UNH) are worth seeing.
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Hospital operator UHS shares are in a buy zone right now. Shares of PODD, Medpace, Neurocrine Biosciences and UnitedHealth are on the bases, trying to maintain key support levels.
Remember that the stock market rally is under pressure, with the S&P 500 and Nasdaq falling below their 50-day moving averages. Many leading stocks have fallen sharply in recent days. Investors should be careful when making any purchase.
NBIX shares are active IBD Classification Table, with Medpace on the Leaderboard watch list. MEDP shares are in the IBD 50.
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Stock of Insuletas
Insulet’s shares fell 1.1% last week to 298.99, retreating from 316.44 on Tuesday, but finding support at the 21-day moving average. PODD shares have closed above their 21-day line since Oct. 23.
Insulet stock has a flat base with a 320.10 point of purchase. The flat base is part of a base on base training. More broadly, PODD shares have been range-bound since early 2021, with a series of failed bases until a powerful earnings gap on Nov. 4 that also ushered in the latest consolidation.
Insulet’s earnings growth is picking up, more than doubling in 2021 and approaching that this year. Analysts expect a 151% EPS gain in 2023.
Medpace Actions
MEDP shares rose 0.1% to 206 last week, recovering from the 50-day line on Friday. Stocks are working on a buy point of 235.82 from a 16% deep consolidation alongside 45% deep cup base. The latest consolidation follows a large earnings gap on Oct. 24.
Medpace helps conduct research on new drugs and medical devices, especially biotechnological ones. Profits and sales growth are picking up.
Universal health actions
UHS shares rose 6.6% to 135.77, coming off a cup base with handle on Friday. The official buy point is 132.83. However, the base has many flaws. It has a depth of 45%, now with a previous uptrend. Shares of the hospital operator have also risen from late-October lows. Ideally, the UHS stock would forge a new and tighter footing, just as the PODD and Medpace stock have.
Universal Health’s profits have fallen for five consecutive quarters, but are expected to rebound with a 10% increase in 2023.
Neurocrine Biosciences Actions
Neurocrine shares lost 5 cents to 117.19 last week, closing below a 50-day rising line for the first time since September 29. Stocks already tested the 50-day/10-week line last month, but rallied quickly. NBIX shares are expected to start from a flat base with a buy point of 109.36.
Biotech needs to consolidate for a few weeks, ideally forming a new base, before a new entry is developed.
Neurocrine’s earnings growth has gone from -96%, -40%, 17%, 69% in the last four quarters, with sales growth of 31% for three consecutive quarters.
UnitedHealth Stock
UNH shares fell 2.9% to 523.70 last week, dipping below the 50-day line and rebounded from the 200-day line on Friday. UNH shares have a buy point of 558.20 from a flat base next to a cup-handle pattern, according to MarketSmith Analysis.
UnitedHealth’s stock has many qualities of a long-term IBD leader. Buying near the 200 and 50 day lines may be a good place to start a position on a long-term leader. Another possible entry is above Tuesday’s high of 551.09, which would break a short trend line.
Follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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