Jeff deGraaf: Healthcare Stocks Rallying from Massive Base

By on July 23, 2012

The number one ranked technical analyst by Institutional Investor magazine for the last seven years running has been Jeff deGraaf of Renaissance Macro Research. He was on CNBC a couple of days ago speaking to Simon Hobbs about a sector that has been building “beautiful, massive bases” for years. The sector deGraaf was referring to was healthcare, “whether it’s biotech, whether it’s big pharma.”

The thing deGraaf said what he liked most about the healthcare sector was that, “he gets very few incoming phone calls about healthcare and they’re really in this neglect phase.” deGraaf added the rally in the healthcare names looks sustainable to them.

One of their favorite stocks is Amgen according to deGraaf. The stock went sideways for 10 years and is now starting to see momentum said deGraaf. The strong base formation means Amgen could be a double in 3-5 years. They see similar base formations in all the big pharmaceutical names.

Josh Brown of the Reformed Broker was on hand and mentioned Pfizer, which has also had a strong move recently. deGraaf explained that the moves in stocks are large attributable to the sector they are associated with, or what he called “attribution.”

Hobbs asked deGraaf what his opinion was of the Euro/Dollar. It was deGraaf’s opinion the dollar would be stronger for the next several quarters, if not for a couple of years. Interest rate differentials are going to attract capital to the U. S. dollar, deGraaf said.

SMA Comment: A recent post here noted a breakout of the big growth companies; many of which are in the healthcare sector.

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