How to use the COVID-19 Testing Kit list to diversify

Hey folks, it's Karen, Head of Data Science at Stock Card. This week I used the COVID-19 Testing Kit and meshed it with one fundamental indicator and two technical indicators using the new Filter function on the Discover page, used to result to come up with stock on my Watchlist. Let me share with you how I went about this screening.

Steps to follow

Visit Stock Card's Discover page, and follow these steps:

1. Type in “testing” in the search bar underneath “Industry, Sector, and Keywords.
2. ​Stock Exchange -  NYSE or Nasdaq.
3. Past investment return - Good: outperformed the market.
4. Chaikin Money Inflow - Good: Bullish 20-day money inflow.
5. Relative Strength Index - Stable (in between 30 and 70)  or Bearish (less than 30) RSI. Note that RSI is a contrarian indicator. With an RSI less than 30, a stock is considered “oversold.”  When this status is combined with positive 20-day Chaikin Money Flow, it is a signal that a trend reversion is likely to happen.

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​If you are a Stock Card user (on our free Starter plan or premium plans), you can see the final results by clicking on this link. It is noteworthy that the results may vary day to day due to price changes in the stocks included in the collection. As of the closing on Friday, September 11, 10 stocks are included in the screening results. Click to view the results, or continue reading.

Using filter results

The overall market has been quite volatile since the indices (e.g., Nasdaq-100, S&P 500) peaked on September 2. In particular, the rally of tech stocks fueled by Softbank has receded, and cautious investors may be inclined to refrain from “buying the dip” in the FAANG and tech stocks resulting in drastic declines in some of Stock Card most popular stocks. What other stocks can investors consider to diversify their portfolios away from the technology sector? Investing in the stocks in the COVID-19 Testing Kit collection could be an excellent way to get exposure to the biotech and healthcare sectors and diversify one’s portfolio. 

Let’s take Thermo Fisher Scientific Inc (NYSE: TMO), one of the ten stocks in the filtering results, as an example. 

Add to watchlist

The chart below shows that TMO has outperformed the S&P 500 index throughout the year and is very close to the Nasdaq-100 (NDX) Year-to-Date returns daily based on returns. In the most recent pullback since Sept 3, as both S&P 500 and Nasdaq have been laggard, TMO has shown increasing strength, which is reflected in the daily returns. This may qualify TMO as a good addition to your watchlist.

View TMO's Stock Card

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