Possible New Leaders

Wednesday, July 30, 2008

The market needs to find some new leaders as I stated in my post yesterday. Visa's technical pattern has followed-through to the upside and earnings after the close look to have impressed Wall Street. Mastercard's technical pattern is bullish as well and it reports tomorrow morning. We will see if these two credit card companies continue to excite investors. Visa and Mastercard are the two premier financial companies because neither has felt the pain of the other financials; their revenue is transaction-based, they do not service the actual debt.

Today, I found another sector of possible leaders: midcap biotechnology & drugs. Companies such as Celgene (CELG), Gilead (GILD), Genzyme (GENZ), Biogen Idec (BIIB) and Amgen (AMGN) fall into this group. These companies have the characteristics of leaders such as high margins, solid growth rates and innovative products. The technical chart patterns are all bullish as well with all the stocks trading near 52-week highs and looking ready to break out to new highs. Amgen's new product and earnings release vaulted the stock to new 52-week highs showing that this group may be ready to run. A more conservative investor might consider building a portfolio of these names as they begin breaking out.

Perhaps the market is finding some new leaders...


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