Rotation to healthcare ?Analysis of NLBNPIT1YHG3 certificate: EXACT SCIENCES, VRTX, AGILENT TECHNOLOGIES
Article debut: 18 March 2025
The certificate is at justcertificate.com
As a general rule, "buy the rumors and sell the news" works in most cases, so we won't deny it, but reports of rotations to industries like healthcare persist. True? No need to know, as technical and quantitative analysis can provide guidance for our decisions.
Analyzing spot price relative to the exponential moving average in 200 periods (EMA) is a popular tool. This simple indicator shows how many companies have maintained the average price computed over 200 days, which technical analysts use to assess the state of interest in the stock. Not the most accurate method, but used by many, hence including us.
Use TradingView's stock screener to filter S&P 500 healthcare technology stocks (we get 61 across all healtcare industries) and then apply a price filter over the EMA for 200 days (22 companies). The ratio is about 40%, which is in line with the index, and 10% higher than Information Technology and 12% higher than Consumer Discretionary. We were neither hyped nor market-disinterested. A good certificate may be profitable if a sector's side phase.
We can activate industry filters using JustCertificate and have about 300 healthcare-related certificates. We limit the underlying certificate stocks to three to avoid including other sectors as much as possible, and there are about 250 active certificates.
The NLBNPIT1YHG3 is in my wallet, and now it costs around 86 euros with Exact Sciences as the "worst of" and less than 30% margin above the coupon barrier. Exact Sciences develops cancer detection and prevention tests. More than a pharmaceutical title, it can be considered in biotech, with volatility closer to Nasdaq stocks.
It is a contrastive situation. The weekly candlestick chart shows that at the time of certificate issuance in the retail market, Exact Sciences was down nearly 60% from its 2021 peak and was in the midst of a major head and shoulders that broke the master Point Of Control (POC) of 64 USD, causing the first support area to drop to 45 USD, which matched the second POC that stopped the drop. From there, the sock tried to reach the master POC twice and failed to close the gap when the company missed earnings on November 4, 2024, indicating that sellers dominate the 65 USD liquidity area.
The price is currently at 45 USD at the secondary POC, with a weekly shadowed candle that may indicate buyers contrasting sellers in that price range. The title moves on a clear descending trend line with declining max prices but min prices compression from 32 USD. Fair value might be 45–61 USD among the two POC.In fact, 12 statistical models by Investing.com place fair prices around $50.
As always, your risk tolerance and portfolio benchmark determine your appetite forr this certificate. Based on my criteria, the certificate is attractive with a 20% return, 11.4% cumulative cedolar flow, and 40% potential current entrate, as estimated by JustCertificate.
