EarningsBeats Digest

Published: Mon, 04/11/22

EarningsBeats.com Digest for April 11, 2022

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Model ETF Portfolio: Sneak Preview

Monday, April 11th at 4:30pm ET

Every 90 days, Chief Market Strategist Tom Bowley releases a new batch of ETFs that are meant to be held for the subsequent 90 days. This event is a preview of our members-only event on April 19th, where Tom's latest picks will be announced. When it comes to ETF investing, our mantra is KNOW WHAT YOU OWN. During this session, Tom will demonstrate how our research will help you know what you own if you're an ETF investor and will discuss the strategies he uses to construct the Model ETF portfolio that is available to all EarningsBeats.com members.

This is a free event that is open to all EarningsBeats subscribers, including you! You will receive instructions later today. The event will be recorded for those unable to attend live.

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Health Care Takes Over Leadership Role

Health Care (XLV) has been the leading sector over the past week and month as Wall Street throws more and more money towards the group. All industry groups have been performing well within health care, but one in particular is gaining more of my interest. It's the medical equipment ($DJUSAM) industry, which has a secular bull market history of outperforming the S&P 500. First, check out this 10-year DJUSAM history of relative performance vs. the benchmark S&P 500:

This confirms extremely strong relative historical performance vs. the S&P 500 over the next 3 months as this group tends to outperform nearly every May, June, and July. But I only use seasonality to confirm technical strength and that's where I really begin to like this group. On this next chart, I want you to check out the recent bounce off the 20-day EMA (suggesting an uptrend is in play) and then the subsequent price breakout to a 3-month high:

The long-term uptrend is nice, but I do want to make sure that the DJUSAM holds the relative support vs. the S&P 500 that it established in January/February. One stock within the DJUSAM that's been consistently performing well has been Inspire Medical Systems, Inc. (INSP). You can't see it on the above weekly chart, but INSP pulled back last week to test both price support and its rising 20-day EMA. That combination, along with what history says should be solid industry group performance in the months ahead, makes INSP a compelling individual stock selection.

Happy Trading!

Tom Bowley
Chief Market Strategist

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