Risk-tolerant traders looking for some added excitement with the healthcare during third-quarter earnings season have several leveraged ETFs to consider. The Direxion Daily Healthcare Bull 3X ETF (NYSEArca: CURE) is one of the dominant names among those funds.
CURE seeks daily investment results equal to 300% of the daily performance of the Health Care Select Sector Index. The index CURE tracks includes domestic companies from the healthcare sector, which includes the following industries: pharmaceuticals; health care equipment and supplies; health care providers and services; biotechnology; life sciences tools and services; and health care technology.
There are other catalysts to consider, including that the U.S. economy is moving into the late-cycle phase, overall growth may slow and signs of an economic slowdown could pop up. Consequently, investors may also turn to defensive sectors that are less economically sensitive, such as healthcare.
CURE Earnings Season Opportunities
Sophisticated traders often deploy leveraged ETFs, including CURE, during earnings seasons to take advantage of short-term moves. Data suggest analysts are currently bullish on healthcare stocks and the sector is already one of the best-performing groups in the S&P 500 this year.
“At the sector level, analysts are most optimistic on the Energy (59%), Health Care (58%), and Materials (58%) sectors, as these sectors have the highest percentages of Buy ratings,” according to FactSet.
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Industry observers argue that medical technology companies can tap into increased healthcare spending among emerging economies while the U.S. market has matured and could experience slower growth. Looking ahead, in the years through 2024, spending growth is projected to average 5.8% and peak at 6.3% in 2020. CURE’s index allocates about a quarter of its weight to medical device, life sciences and healthcare technology companies.
The week starting Oct. 15 through the week ending Nov. 2 will be a critical period for CURE. Over that span, approximately 90% of the stock’s in CURE’s underlying index report third-quarter results, according to Direxion.
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