Tech, Healthcare Outperform as Oil Prices Crash – Schaeffers Research (blog)

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It was another record-setting week for stocks on Wall Street, even as oil prices plunged into bear-market territory. But while the Dow and S&P 500 Index (SPX) carved out new record highs, it was the Nasdaq Composite (COMP) that turned in the best percentage performance. Amid a big rally in tech and healthcare stocks, the COMP is on track to settle the week up 1.6% — and snap its two-week losing streak

FAANG, Tech Stocks Stay Front and Center

Apple stock helped kick off the week on a high note, after the tech shares logged their best single-day performance since early February on the back of a price-target hike. Amazon, meanwhile, topped out at a record high on Monday, as the e-tailer continued its path of destruction — sending retail stocks tumbling on news of its Amazon Prime fashion service. Netflix also bounced back, and if history is any guide, it may be a prime time to “buy the dip” on the streaming stock.

Elsewhere in the tech world, Pacific Crest is eyeing a new upside catalyst for chip stocks like Nvidia, while these two software stocks notched new highs. On the other hand, BlackBerry stock may have let down options traders, though the shares still sport a huge year-to-date lead.  

Healthcare Stocks Outperform After Senate Obamacare Bill

Healthcare stocks also saw a lot of attention this week, after Senate Republicans unveiled their closely guarded Obamacare replacement bill. With a vote on the measure due in the final week of the second quarter, these three medical stocks could be ready to hit record highs.

Elsewhere, Valeant shares jumped out of the gate on Monday, following news hedge fund manager John Paulson has joined the drugmaker’s board. Despite some downbeat analyst attention, VRX stock is still set to end the week up 22%. It was far from the only drug stock to have a big week, though, as Cara Therapeutics saw some monster gains thanks to a series of positive drug news, including a major nod from the FDA. Also, sector peer Regeneron Pharmaceuticals rallied to new highs, while these two biotech ETFs could be in for a big July. 

Steel and Energy Stocks Go in Different Directions

Steel stocks also had a big week, after Longbow Research waxed optimistic the sector. AK Steel, for instance, is looking at its highest weekly close since late April. As for other commodities, options traders took action amid oil’s weakness, once again slamming the United States Oil Fund (USO). Of course, crude’s drop meant rough times for names like Chevron and Schlumberger, while Transocean stock dropped to new lows. But even as oil prices sank, solar stocks managed big gains, including a fresh six-month high from First Solar stock

Options Trading Ideas for Next Week

Even with stocks lingering near record highs, plenty of signs suggest we haven’t hit a market top. Still, we’re working heard to find new trading ideas. For example, these two video game stocks still appear to be attractive targets for call buyers, while these airline stocks could also be offering a prime options buying opportunity. Or you could follow the lead of a number of options traders who’ve turned to foreign stock markets, such as Chinese stocks. Either way, be sure to first check out these tips for options trading, and learn about implied volatility and our own in-house stock indicators

Looking ahead to next week, the Fed could stay in focus, with another round of speeches from regional Fed presidents on tap, and traders will also digest Nike earnings. Of course, it’ll also mark the last trading week of the second quarter, which could mean several stocks could benefit from — or fall victim to — stock market window dressing