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Kensho Stats

These stocks should lead Nasdaq breakout, statistics show

A technician prepares a flow cell slide for loading onto a genetic sequencing machine at a Regeneron Pharmaceuticals laboratory in Tarrytown, N.Y.
Mike Segar | Reuters
A technician prepares a flow cell slide for loading onto a genetic sequencing machine at a Regeneron Pharmaceuticals laboratory in Tarrytown, N.Y.

As risk appetite returns to markets, the tech-heavy Nasdaq Composite is on a roll, topping its previous record close set last year and hitting a record intraday high Tuesday.

Kensho, an analytical tool used by hedge funds, can tell us the stocks most likely to trade higher during rapid rallies by the index. The result? Think big and look to biotech. The following stocks should lead the way if that breakout continues, statistics show.

When the Nasdaq rose 5 percent or more in one month, some of the best-performing stocks were the biggest tech names, Kensho shows. Apple, Amazon and Alphabet all tended to outpace the composite itself. Over the nearly 60 instances since 2005, Apple gained nearly 9 percent on average.

Another good bet was to simply buy the basket of the biggest companies in the index — the Nasdaq 100.

Also keep an eye on biotech stocks if you think the Nasdaq will continue to move higher.

They are another big contributor to the index and individual names like Regeneron, BioMarin Pharmaceutical and Alexion Pharmaceuticals were among the best performers in the Nasdaq composite on these occasions.

Disclosure: NBCUniversal, parent of CNBC, is a minority investor in Kensho.