Stock Exchange: Time To Reconsider Healthcare? – Align Technology, Inc. (NASDAQ:ALGN)

Each week the Stock Exchange highlights the results from different technical trading methods. We also provide contrast, and often dissent, from a fundamental analyst. It is always interesting when we find a pick where multiple methods agree. This week the entire group gives the nod to healthcare stocks, and there is even some fundamental support.

Review

Our last Stock Exchange suggested that it might be time to buy the dip in IBM (NYSE:IBM). The unusual agreement came because differing methods reached a similar conclusion. We see the same thing this week on healthcare, although the specific stock choices vary. Combined with the group endorsement of Nvidia (NASDAQ:NVDA) three weeks ago, we have an unusual streak. Maybe the Stock Exchange discussion should be held around a campfire instead of before the poker game!

Let’s turn to this week’s ideas.

This Week – A Fresh Look at Healthcare?

Healthcare stocks started a decline when drug prices became a campaign issue. The weakness continued after the election. Uncertainty reigned. Would ObamaCare be repealed? Which healthcare stocks would survive the policy change? Recent political developments have not clarified the uncertainty, but some candidates are showing strength.

Let’s start with RoadRunner, who has an interesting, non-biotech pick.

Road Runner: I have discovered my favorite chart pattern in Align Technology (ALGN). Here is the rising channel and the current position at the bottom.

J: I keep asking you to earn your lizards by drawing the channel.

RR: Even though I cannot draw, I pecked out this chart:

J: Isn’t that a huge break of the channel in April? Shouldn’t we draw the channel to include that break? And this is another of your Wile E. Coyote stocks.

RR: I suppose you will once again invoke Chuck Carnevale and F.A.S.T. graphs.

J: How did you know? The fundamentals might catch up with your purchase in a few years. And here is a nice summary (Timothy Gornall at Seeking Alpha) of what the company…

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