Defensive rotation: Dow hits record highs while tech bleeds — accumulate Eli Lil
Thesis
While the tech-heavy Nasdaq is falling due to chip struggles, the Dow Jones hit a record high, signaling a classic rotation into defensive sectors. Eli Lilly just hit new highs thanks to huge results and Medicare inclusion for its GLP-1 drugs, insulating its revenue from economic downturns. With only 57,000 jobs added in June and unemployment rising to 4.2%, the economy is clearly cooling off. Buying dominant healthcare names like Eli Lilly protects a portfolio during an economic slowdown while the government-backed Medicare inclusion guarantees steady sales.
Strategy approach
Build a rule-based strategy that enters long LLY on D1 when the Dow Jones Industrial Average (DJI) makes a 20-day high while the Nasdaq 100 (QQQ) closes negative on the same day. Exit if LLY drops below its 20-day moving average. Max hold 30 days.