The Omicron variant re-asserted the strength of biotech equities, making the Direxion Daily S&P Biotech Bull 3x Shares (LABU) an option for traders.
As investors turned up the risk dial, COVID-19 cases ticked up towards the end of the year, and now with the new variant, they can provide an attractive option for a short-term pop.
“Like it or not, biotech stocks are becoming an increasingly viable play in the stock market today,” a StockMarket.com article says, published on Nasdaq.
“By and large, this remains the case as the current coronavirus pandemic lit a fire under the industry,” the article adds. “Namely, both seasoned and new investors alike likely learned more about how biotech firms work. Because of this, some of the top biotech stocks around would remain in focus now. Given the latest developments regarding the Omicron variant of the coronavirus, investors may not want to overlook the sector now.”
LABU seeks daily investment results of 300% of the daily performance of the S&P Biotechnology Select Industry Index. The fund invests at least 80% of its net assets in financial instruments and securities of the index, ETFs that track the index, and other financial instruments that provide daily leveraged exposure to the index or ETFs that track the index.
A Healthcare Option
Another option traders can look at is the Direxion Daily Healthcare Bull 3X ETF (CURE), which seeks daily investment results equal to 300% of the daily performance of the Health Care Select Sector Index. The fund achieves this exposure by investing at least 80% of its net assets in financial instruments, such as swap agreements, securities of the index, ETFs that track the index, and other financial instruments that provide daily leveraged exposure to the index or to ETFs that track the index.
The index includes domestic companies from the healthcare sector, which includes pharmaceuticals, healthcare equipment, and supplies; healthcare providers and services; biotechnology; life sciences tools and services; and more. These sub-industries have all been affected by the pandemic in some form or fashion, giving traders dynamic opportunities to play the market.
Up 63% for the year, bulls have been on the right side of the healthcare trade in 2021. In terms of technical trading, short-term and long-term momentum are both showing strength with the 50-day and the 200-day moving averages in uptrends.
For more news, information, and strategy, visit the Leveraged & Inverse Channel.
