Healthcare ETFs have been displaying positive momentum. Traders looking to bolster that healthcare momentum profile can consider leveraged ETFs, such as the Direxion Daily Pharmaceutical & Medical Bull 3X Shares (NYSEArca: PILL).
PILL seeks 300% of the daily performance of the Dynamic Pharmaceutical Intellidex Index, which consists of common shares of companies that are principally engaged in research, development, manufacture, sale or distribution of pharmaceuticals and drugs of all types.
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 health care. Additionally, healthcare derives a significant portion of its revenue on a domestic basis, meaning it is somewhat immune to the stronger dollar and trade war talk.
“Beyond the trend of positive earnings per share surprises from the likes of Pfizer, Eli Lilly and Regeneron Pharmaceuticals, there are a host of other factors that make big pharma the clear favorite going into Q2 earnings season. Not the least of which was the FDA’s recent approval of an experimental treatment for alzheimer’s disease from Biogen that boosted the company’s stock by nearly 20 percent in a matter of hours,” according to Direxion.
PILL’s underlying index allocates over 95% of its combined weight to pharmaceuticals and biotechnology stocks, levering the fund to an array of important fundamental factors.