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Medical Stocks Jazz, Horizon Are Accelerating But Iqvia Is Hitting The Brakes

Jazz Pharmaceuticals (JAZZ) and Horizon Therapeutics (HZNP) stand among a cadre of accelerating medical stocks, while big names like Iqvia Holdings (IQV) are hitting the brakes.




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According to MarketSmith.com, Jazz and Horizon stocks are trending in a positive direction. As is Alexion Pharmaceuticals (ALXN), soon to be acquired by AstraZeneca (AZN). All three medical stocks took on fresh buy points over the last month, though Horizon’s breakout quickly broke down.

Meanwhile, medical stocks Iqvia, PRA Health Sciences (PRAH) and Danaher (DHR) are among the “decelerating leaders” on MarketSmith.com. However, it’s important to note that all three are trading at or near record highs.

Medical Stocks Accelerate

The accelerating leaders list considers stocks with a high Accumulation/Distribution Rating and acceleration in the industry group. The Accumulation/Distribution Rating measures whether big investors are buying, or selling, that stock.

Ratings of A and B indicate big investors are buying a stock. C is neutral, while D and E ratings show big investors are selling stocks.

Medical stocks Jazz and Alexion rate A and A-, respectively. Both are involved in big mergers at the moment. Jazz is buying cannabis-focused biotech GW Pharmaceuticals (GWPH), as Alexion is about to be acquired by Big Pharma giant AstraZeneca.

Horizon has a lower, but still positive, B rating. The company is coming off a tough first quarter in which supply issues constrained its biggest product, eye-disease drug Tepezza. That caused both sales and adjusted earnings to tumble.

The medical stock narrowly broke out in late April, but quickly fell about 13% below its buy point. Investors are encouraged to sell a stock that drops 7%-8% below its entry.

Jazz is looking to retake its buy point at 178.74 out of a flat base. Alexion is now above a buy zone out of a flat base entry at 162.70.

By the closing bell, Jazz stock sank 1.3% to 176.80. Alexion shares rose 0.7% to 174.75. Horizon stock also popped 1.8% to 93.79.

These Leaders Are Decelerating

MarketSmith’s decelerating leaders list shows stocks with deterioration in relative strength and industry group strength.

Iqvia heads up the list. And it still has a perfect Accumulation/Distribution Rating of A+. But its Relative Strength Rating is now a 77 out of a best-possible 99. This rating measures a stock’s 12-month performance. The best stocks have an RS Rating of at least 80.

The medical stock belongs to the Medical-Research Equipment/Services industry group. The group itself ranks No. 115 out of 197 industry groups Investor’s Business Daily tracks. This puts the group itself in the bottom half of all groups.

The same goes for medical stock PRA. It has a high Accumulation/Distribution Rating of A. But it belongs to the same middling industry group as Iqvia. PRA has a healthier RS Rating of 86, however, according to IBD Digital. Still, both medical stocks are trading near record highs.

Danaher is also considered a decelerating leader, though shares are now in a buy zone above a buy point at 248 out of a cup-with-handle base. It RS Rating is a weak 55 and it belongs to the Medical-Diversified industry group. That group ranks No. 175 out of 197.

Still, with an Accumulation/Distribution Rating of A-, it’s clear big investors are still taking on the medical stock.

On Monday, Iqvia and Danaher stocks each lost 1.1%, ending the regular session at a respective 231.48 and 250.91. PRA shares dipped 0.3% to 171.90.

Follow Allison Gatlin on Twitter at @IBD_AGatlin.

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