The IBD 50 has taken on a new complexion in the past week or so. A variety of health care companies has begun to replace shipping, energy and fertilizer names on the premier list of growth stocks.
XThe rotation to new names comes as the Big Picture tracks the stock market's attempt at a new rally from its bear market plunge, and it could mean a new batch of growth stocks will lead the next uptrend. A tiny number of the new names are breaking out of new bases now.
Among health care stocks that joined the IBD 50 in the past week are HMOs UnitedHealth (UNH), Cigna (CI), Centene (CNC). Centene has formed a double-bottom base with a buy point of 87.44, according to MarketSmith chart analysis.
UnitedHealth has rallied strongly this week within a consolidation that shows a 553.39 entry. But UNH's base also has the outline of a double bottom; thus, 507.35 appears to be an alternate entry. Cigna on Thursday succeeded in retaking its 50-day moving average after pulling back in a failed attempt to break out of a cup with handle in May.
All three belong to the managed health care group, which ranks No. 38 out of IBD's 197 industry groups.
Within the group, all three growth stocks are ranked in the top five based on Composite Rating, according to Stock Checkup.
Growth Stock Recovers Fumble
Vertex Pharmaceuticals (VRTX) initially fumbled an attempt to break out above a cup with handle with a buy point of 276.10, but has rallied and is now clearing an alternative buy point at 279.23. The buy zone goes up to 293.19.
AstraZeneca (AZN) has also formed a double-bottom base. The buy point is at the middle part of the W shape at 67.50.
Harmony Biosciences (HRMY), which develops treatments for neurological disorders, cleared a cup with handle entry of 47.21 on Wednesday and blasted past the top of the 5% buy zone on Thursday. So the growth stock is extended beyond the optimal buy point now.
McKesson (MCK) is rallying from the bottom of a potential flat base. The proper buy point is 340.04.
In the medical software group, Evolent (EVH) and IPO Privia Health (PRVA) are both new in the IBD 50 and have been working on bases. EVH stock has formed a cup with handle with a buy point of 33.24. PRVA stock has cleared the 29.07 buy point of a cup base. The buy zone goes up to 30.52.
Lantheus (LNTH), which makes products for medical diagnostic imaging, has a strong enough Composite Rating (97) and Relative Strength Rating (99) to earn a spot on the IBD 50, but it appears to falling into a new correction after a strong run-up since February. Shares have slipped moderately below the 50-day moving average.
Drug distributor AmerisourceBergen (ABC) also is in a short-term downtrend, for now. After running up for 17 weeks since breaking out of a cup base in December, the growth stock nosed over in April and sank below its 50-day line. It's now testing support at its 200-day moving average.
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The post Inside IBD 50: Tide Of New Names Flows Onto Growth Stock List appeared first on Investor's Business Daily.
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