Healthy Skepticism:
Healthcare was the best performing group in 2018, and 2019 has started positively, albeit thus far it is only outperforming the defensive staples and utilities (notice overall with technology and discretionary among the top four is a good sign going forward). That being said the group must be applauded for being just 4% off most recent 52 week highs, and is now trading right at a double bottom with handle pivot of 93.09. This group is acting healthy, pun intended, and M&A activity was seen with ONCE, and many upside gaps were recorded, with BLUE popping above its 200 day SMA for the first time in 7 months.
Abundance of IPOs Concering?
Below is the chart of the price of recent IPOs and it shows the last 11 new issues to come public were in the healthcare arena. Too much as bankers are rushing out too many names in the best behaved space last year? Of course this is just conversation material as we focus all of our efforts purely on PRICE action. In that regard we have seen some interesting names like a GOSS up more than 24% over the last 2 weeks alone. GH is doing better up 34% in the same time period and broke above the very round 50 number.
Examples:
We frequently highlight “old tech” names, and the chart below, of BSX and how it appeared in our 2/7 Healthcare Report could be classified as an “old healthcare” play. This name acted somewhat firm during last years meltdown, retreating just under 20% from the early October highs to the 12/24/18 low. That relative strength was noteworthy and it just stuck its head above a 39.54 cup base pivot in a pattern 4 1/2 months long. Todays just missed its fourth straight CLOSE above the round 40 number by one penny.