Biotech vs. Oil

After weeks of the NASDAQ straggling behind its counterparts, the tech-heavy index was the only member of the Big 3 to finish on the plus side in Wednesday's session. It was helped by a strong performance from biotech. Meanwhile, oil slipped again by more than 2% to around $42.50, which really took a bite out of the Dow and S&P. 

Specifically, the NASDAQ had a solid session with an advance of 0.74% to 6234. However, the Dow was off by 0.27% to 21410 and the S&P slipped 0.06% to 2435.6. 

The portfolios included three new picks from Large-Cap Trader today, while Insider Trader also added. Give these new buys a look in the highlights section below, along with some analysis on biotech and oil. 

Today's Portfolio Highlights: 

Insider Trader: Shares of Dollar Tree DLTR have plunged 14.5% in the last month due to worries about the retail industry in general. It is now near its 52-week lows. But not ALL retail is in trouble, and a closer look at DLTR shows a company that is expected to grow earnings by 16.7% this year and recently raised the lower end of its full year EPS guidance. But what really captured Tracey's attention was when two directors bought shares of their own company. This vote of confidence convinced the editor to add DLTR to the portfolio on Wednesday with a 10% allocation. The full commentary has a lot more on this new pick. 

Healthcare Innovators: Thanks to the strong performance from biotech on Wednesday, this porfolio had an impressive day with four of the top five movers amongst all Zacks services. The biggest winner was Immune Design Corp. IMDZ, which was up by nearly 19.4%...but that wasn't all. HI also had positive performances from Incyte Corp. (INCY, +7.55%), Juno Therapeutics (JUNO, +7.2%) and BioMarin Pharma (BMRN, +7%). 

Large-Cap Trader: The portfolio had 20% in cash heading into today's session, so John decided to put most of that to work with three new additions. Each of these defensive picks will have an approximate allocation of 4% (12% in total), leaving enough left over for a long-term pick down the road. The three new buys are: 

• Wellcare Health Plans WCG: This provider of managed care services has a Zacks VGM Score of A and is part of a space in the top 25% of the Zacks Industry Rank. It reports again on August 1. 

• Hitachi (HTHIY): This diversified electronics giant is based in Japan, but much of its potential comes from all the business it does in faster-growing Asia. It has a Zacks VGM Score of A and is in the top 31% of the Zacks Industry Rank. It reports again on August 4. 

• SKF AB (SKFRY) is a Swedish industrial conglomerate, which means its part of a space in the top 13% of the Zacks Industry Rank. It has a Zacks VGM Score of B and will report on July 20. 

Read the editor's full commentary for a lot more on each of these new picks. 

Surprise Trader: "U.S. stocks slipped again in Wednesday trading as the negative impact of the commodity slide continues to reverberate throughout the stock market. Both the S&P 500 and the Dow finished in the red as a result, while the Nasdaq was able to post decent gains thanks to its low exposure to the commodity side of the market. 

"Things really weren't that bad for the EIA Petroleum Report this week, as we actually saw a decline in crude oil inventories, and gasoline too. However, the sentiment remains incredibly bearish and weekly domestic production rose yet again, hitting 9.35 million barrels a day.

"Despite the lower prices, producers here in the U.S. seem in no rush to cut their production levels. Oil below $40 seems like a real possibility now, and I will look to dial back crude exposure in the next earnings season so long as this sluggish trend continues." -- Eric Dutram 

Zacks Counterstrike: "The last couple days I've been talking about the biotech sector and how it seems to be breaking out. Well today that move became ridiculous as biotech moved another 4% plus higher, causing leveraged biotech EFT LABU to shoot up more than 10% today. The breakout has been forming naturally, but today's move was primarily due to a report that Trump will ease industry regulations.

"Trump has said that he will lower prices, which has hurt biotech in the past. However, with regulations eased, more drugs might hit the market, which would negate the pricing issue for some companies.

"Whatever Trump does, the market looks like it's getting ready to applaud it. The XBI has officially broken out and the Fibs tell me $120 is a price target to shoot for. This would of course be a longer term goal. For those looking to really leverage up, LABU would see a massive move if this trend continues. If you missed this biotech move I wouldn't chase it, the sector is very volatile and should give a dip to buy. In fact, if LABU pulls back, I think Counterstrike might try to scoop that one up." -- Jeremy Mullin

Have a Great Evening,
Jim Giaquinto