Healthcare Is No Longer Dead Money.

Healthcare ranked as the worst place to invest for three years. That’s over.

Nobody wanted this sector. Tech was eating everything, and every drug company on the board had the same cloud hanging over it — the government was about to negotiate their prices down, and nobody knew how bad it was going to get.

Then, on January 1, the first negotiated prices actually took effect, and it landed a lot softer than everybody feared. The worst case was already in the stocks. Money that had been sitting in tech went looking for a cheaper option, and healthcare was right there.

Merck is what that looks like on a chart.

The stock was $77 last August. It’s $127.47 today.

And it’s not just the sector carrying it. On July 16 the FDA approved Lipfendra, Merck’s cholesterol drug, the first once-daily oral PCSK9 inhibitor ever approved. Phase 3 data showed LDL cuts in the 56 to 59% range with safety that looked like placebo. The stock jumped 3.25% that day and pushed over $131 the next.

That’s on top of a run of Keytruda approvals in bladder, breast and kidney cancer, a Phase 3 trial that just hit its primary endpoint, and a plan to launch 20 new drugs by 2030.

Now the chart.

The EMAs are stacked on the daily and the weekly. On the daily the 8 sits at 125.90, the 21 at 124.46, the 34 at 122.86, and price is above all three. Fastest on top, slowest on the bottom, price leading. That’s the order you want.

Follow that ribbon back to last fall and watch what the stock does — rides it, pulls into it, goes again. Then zoom out to the weekly and it’s the same picture on a bigger timeframe. When both timeframes agree, that’s a real trend, not a bounce.

There’s a squeeze on. The TTM Squeeze is showing red dots on the zero line. That means price has compressed — the Bollinger Bands have pulled inside the Keltner Channels and volatility has been wrung out of the stock. The histogram underneath is positive and building.

That’s the whole reason this one made the list. Compression sitting on top of momentum that’s already pointing up, inside a trend that’s been running eleven months.

And it’s coming off a real base. Merck went sideways from May into June, roughly $110 to $115, and chopped there long enough to shake people out of it. Then it broke to new all-time highs in July. That consolidation is what puts something underneath this move. It didn’t run from nowhere.

Your Action Plan

It’s worth noting that earnings are on August 4, which is right around the corner.

But overall, I love this chart. Stacked EMAs on two timeframes, a squeeze that hasn’t fired yet, an eleven-month uptrend, a base underneath it, and a sector that’s finally getting money after three years of nobody caring.

Literally everything I’m looking for.

If you want to know what else I’m trading, and where I see more opportunities than you’ll want to see, this.