Spdr S&P Biotech Etf (XBI)

Trimmed it. Bought it since Oct. 1 and is now under the 50-day moving average and underperforming the healthcare sector. The position was too big.

This sector in US was a serial underperformer from March 2023 until this past summer. Things have started to change. Biotech has woken up. 

Take a look at XBI; would give you great exposure to the sector. Good way to do it, as the sector tends to be volatile. It's performing much better. Lots of individual names look good. See his Top Picks, where he's using a name from healthcare for the first time in a long time.

A bit more spice in the healthcare sector -- adding cayenne instead of salt. Will be volatile, but the equal weight methodology tries to attenuate that. Capturing early and mid-stage biotech, not dominated by large incumbents. Broad exposure, which also spreads the volatility. When biotech recovers it recovers faster, and we're seeing that. Chart shows explosive growth, but we're barely at new highs.

Lots of opportunity coming in the space, which is a spinoff of AI accelerating drug discovery. Offers an opportunity for growth uncorrelated to big tech, and with significant upside.

Disclosure:  Owns this for clients via the futures market. Though he may own similar exposure at times, he doesn't own the individual ETF. His team creates the exposure in a different way.

He bought more. A pure momentum trade. He's buying a 5-year breakout since $102. He will buy more as it moves up. He expects it to hit $125 near-term.

It was flat for a long while, but has been rallying (up 28% for the year). Biotech, pharma and medical products are coming back.

What would kill this rally is oversupply, but that won't happen because there's a lack of action in the IPO market. XBI remains a safe bet here.

Likes biotech. As investors remain concerned about the Fed not being accommodative, XBI could unwind short-term which would be an opportunity.

Biotechs look speculative in profitability. She prefers big pharma, seeing continued value, despite big moves in stocks.

Healthcare has been an ignored sector, but is enjoying some momentum and will do well in second-half 2024. McKesson, Merck and Amgen, all holdings in this ETF, are doing well and even making new highs. Also, biotech does well when rates come down.

Bought it last year, and just sold it. This stock has broken down.

XBI has been in the $80-90 range. Has strong free cash flow. A good way to diversify away from tech. You can sell calls against it.

She's very bullish healthcare. Buy it at $83. She's selling the $90 September calls, collecting $3.25.