AND WHO TOOK ITS PLACE Two weeks ago $LLY was the name everyone in healthcare was watching, a leader breaking out with the buyers finally showing up. I wrote about it then. Today I am writing the other half of the story, because the tape changed, and the change is the lesson. $LLY cooled off, and my read is not built on one number, it is the whole picture shifting at once. The demand behind it dried up, the buying volume that confirmed the breakout simply left. Its relative strength is still there, but it no longer leads its own sector the way it did, two other names pushed ahead of it. And its position in the cycle slipped from a healthy zone into a caution zone. Put those together and the name dropped from a strong buy to a wait on my scanner. The one thing still fully in its favor is the ownership: verified, real, the big institutions still hold it. So the foundation is intact, but the demand cooled, the leadership slipped, and the timing turned, all at once. That is not one weak signal. That is most of the picture softening while only the base holds firm. The company did not get worse. It is still a great business, and a great company and a great moment to buy are two completely different things. Right now the moment is not here. When the demand, the leadership, and the cycle position all soften together, chasing the name is chasing a memory of strength, not the real thing. And here is what most people miss when they fall in love with one name: while $LLY cooled, the leadership in healthcare did not disappear, it moved. $MRK is now carrying the strongest relative strength in the whole sector, with $ABBV right beside it, both leading while $LLY rests. The money did not leave healthcare. It rotated to the names actually being bought right now. If you only watched LLY, you missed where the leadership went. I am not holding $LLY. I think it is a great stock, but this is not the moment, and I am patient enough to wait for one. What I want is the demand to come back, the leadership to reassert, the cycle to reset into strength, and a real entry to form where my risk is defined, not a chase at the top of a move that already ran. A great business bought at the wrong moment is still a bad trade. The company earns a spot on my watch list. The entry has to earn its own. This is the whole discipline in one name: read every part of the picture, not one signal, know the difference between a great company and a great entry, and have the patience to wait for the setup instead of the story. That is exactly what I teach in my guide, how to read a name across every factor that matters and wait for the tape to hand you the trade instead of forcing it. If you keep buying great names at the wrong moment, that is where I would start. Trading Today, my complete framework. Not investment advice. 🐝
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2 Comments
Amy @sashabear · 19d
I would have to say, unfortunately, that ABBV it's not even close to MRK. I say unfortunately because I own ABBV. I sold covered calls for months so that I could get rid of 400 of my 700 shares. It just became too large part of my portfolio, and my main income from that stock was covered calls. This year it's up 13% whereas MRK is up 42% 😱
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