Healthcare stocks don’t get much love from traders. 

It’s widely considered a defensive group. 

When times get tough, people still need medicines, medical care, and health insurance. Demand doesn’t disappear when the economy weakens.

This is why healthcare stocks often catch a bid when the rest of the market looks shaky.

But healthcare isn’t just a safe haven. It’s also home to some of the market’s most explosive stocks. Think cutting-edge medical device companies to early-stage biotech firms.

And right now, many healthcare stocks are catching a bid. 

Let’s start with one of the biggest: Eli Lilly & Co. (LLY), maker of Mounjaro and Zepbound, recently broke out to fresh all-time highs.

That’s a big deal. Lilly is a roughly $1.2 trillion company—the world’s largest healthcare stock, nearly twice the size of the next-largest, Johnson & Johnson (JNJ).

I’m even more encouraged by the action in biotech. The iShares Nasdaq Biotechnology ETF (IBB) is on the verge of breaking out of a multi-month base.

Biotech is home to some of the market’s most explosive moves. Positive clinical-trial results can change a stock’s fortune literally overnight. 

Take Kodiak Sciences (KOD). Its shares more than doubled after a positive Phase 3 trial for two experimental eye drugs. 

Moderna (MRNA) also more than doubled in August after early results for its experimental melanoma vaccine showed promise. 

Of course, biotech stocks aren’t for everyone. 

Many firms have little or no revenue, and their futures can hinge on a single trial. Good results can send shares soaring. Bad ones can crater them. Even a successful trial doesn’t guarantee approval, or sales. 

That’s why biotech ETFs can make useful trading vehicles. They spread your exposure across multiple companies, so one trial doesn’t make or break the whole trade.

Consider the IBB and the ARK Genomic Revolution ETF (ARKG), which focuses on companies tied to advances in genomics.

Justin Spittler Director of Trading, RiskHedge

PS: Healthcare isn’t the only area of the market that has my attention right now. Yesterday, I added a new trade in Express Trader for one of the strongest artificial intelligence hardware stocks out there. It’s help up remarkably well despite the recent selling in tech.

With a market this choppy, I’m only adding the best-looking setups in Express Trader. Upgrade here.