Healthcare has taken a tough downturn recently with the biotechs catching the brunt of the selling almost like the 7 week losing streak they underwent between the weeks ending 2/28-4/11/14. The IBB lost more than 20% during that span. The recent weakness had the ETF trading between highs of the round 400 number the week ending 7/24 and solid support at the round 300 figure beginning with the week ending 8/28. A double bottom within the ETF, with the intraweek lows the week ending 8/28 of 284.16 and the week ending 10/2 of 285.53 set a solid foundation for the move higher. All 4 weeks ending between 10/2-23 traded well below 300 intraweek but the CLOSES were all well above. Lets look at a couple of the leaders within the group. They will tend to act best once the group finds its footing.
ANAC we looked at in our Wednesday 10/21 Game Plan. That session it found support near its 200 day SMA and we recommended a buy at 86.25 which came very close to also filling in the 7/10. It is now higher by almost 30 handles from that trigger. It is now approaching its 50 day SMA and once can enter with a buy stop above 121 and then through a double bottom trigger of 147.28.
Stocks that can be bought after gap fills are ANAC. ANAC is a healthcare play, and you know what is going on with the sector, up 187% YTD and 260% over the last one year period. Earnings have been on the positive side with gains of 6.8 and 14.7% on 5/7 and 3/13 and losses of 3.2 and 1.9% on 8/7 and 11/7/14. The stock is lower 4 of the last 5 weeks and this week has been brutal thus far declining 15%. On 7/13 ANAC screamed higher by 56% after some positive data and it is now fast approaching that gap. Look to enter at 86.25 with the comfort of the 200 day SMA adding some additional support. It resembles the chart on ABMD, another best of breed name, and I feel it may follow the same path.