The market rally is looking sickly, medical names often stand out. Insulet, Medpace, Universal Health Services, Neurocrine Biosciences and UnitedHealth are all worth watching.
Hospital operator UHS stock is in a buy zone right now. PODD stock, Medpace, Neurocrine Biosciences and UnitedHealth are all in bases, trying to hold key support levels.
Remember the stock market rally is under pressure, with the S&P 500 and Nasdaq falling below their 50-day moving averages. Many leading stocks fell sharply in recent days. Investors should be cautious of making any buys.
NBIX stock is on IBD Leaderboard, with Medpace on the Leaderboard watchlist. MEDP stock is on the IBD 50.
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Insulet Stock
Insulet stock fell 1.1% last week to 298.99, pulling back from 316.44 on Tuesday, but finding support at the 21-day moving average. PODD stock has closed above its 21-day line since Oct. 23.
Insulet stock has a flat base with a 320.10 buy point. The flat base is part of a base-on-base formation. More broadly, PODD stock has been rangebound since early 2021, with a series of failed bases until a powerful earnings gap-up breakout on Nov. 4 that also marked the start of the latest consolidation.
Insulet earnings growth is ramping up, more than doubling in 2021 and approaching that this year. Analysts expect a 151% EPS gain in 2023.
Medpace Stock
MEDP stock edged up 0.1% to 206 last week, rebounding from the 50-day line on Friday. Shares are working on a 235.82 buy point from a 16%-deep consolidation next to a 45%-deep cup base. The latest consolidation follows a big earnings gap-up on Oct. 24.
Medpace helps conduct research into new drugs and medical devices, especially biotechs. Earnings and sales growth are picking up.
Universal Health Stock
UHS stock jumped 6.6% to 135.77, breaking out from a cup-with-handle base on Friday. The official buy point is 132.83. However, the base has many flaws. Its 45% deep, with now prior uptrend. Shares of the hospital operator also have raced higher from the late October lows. Ideally, UHS stock would forge a new, tighter base, much as PODD stock and Medpace have done.
Universal Health earnings have fallen for five straight quarters, but is expected to rebound for a 10% gain in 2023.
Neurocrine Biosciences Stock
Neurocrine stock lost 5 cents to 117.19 last week, closing below a rising 50-day line for the first time since Sept. 29. Shares already tested the 50-day/10-week line last month but quickly rebounded. NBIX stock is expected from a flat base with 109.36 buy point.
The biotech needs to consolidate for a few weeks, ideally forming a new base, before a new entry will develop.
Neurocrine earnings growth have moved from -96%, -40%, 17%, 69% in the past four quarters, with 31% sales growth for three straight quarters.
UnitedHealth Stock
UNH stock fell 2.9% to 523.70 last week, falling below the 50-day line and rebounded from the 200-day line on Friday. UNH stock has a 558.20 buy point from a flat base next to a cup-with-handle pattern, according to MarketSmith analysis.
UnitedHealth stock has a lot of qualities of a IBD Long-Term Leader. Buying near the 200-day and 50-day lines can be a good place to start a position in a Long-Term Leader. Another possible entry is above Tuesday's high of 551.09, which would break a short trendline.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
