Below are the YTD gains of all the major S&P sectors. Stinking up the joint are two laggards, being healthcare and energy. Sure they are still higher for 2019 thus far, barely, but during a one month look back period the XLV is the worst actor lower by 2.4%. Even the once reliable medical equipment ETF the IHI, is now on a current 7 of 8 session losing streak with 3 of the last 4 sessions losing at least 1%. That being said it is just 5% off most recent all time highs. The healthcare group is of course very diverse, and the IHF is down 22% from its most recent yearly peak, and the PPH is down by 3.5% this week thus far and if that holds would be its third worst WEEKLY showing of 2019 so far. Trends tend to stay in place, more likely than they are to reverse, so if you must deploy capital to the arena demand best of breed.
Hard For Even A Mother To Love:
The XBI did register a decent candlestick Thursday, putting an end to a 7 session losing streak. Before one gets too excited it is still entrenched in bear market mode down 22% from its most recent 52 week highs. Last week slumped 7.6%, on the second largest weekly volume in all of 2019 thus far. It has been a rough going for the ETF since finding difficulty at the very round par number between last June-September. It is a well diversified fund, with the top component making up just more than 2% of the ETF. That happens to be SGEN which is having a stellar week as it broke above a bullish ascending triangle pattern that aligned with the round 80 number in a formation one year long. The break carries a measured move to 110, as it found support near the very round 50 figure 11 months ago. There will always be outliers in a sector. Pay attention to them as they will normally be the best performers once they space comes into vogue.
Many technicians will tell you that the healthcare group is one that may be elusive to technical analysis. I happen to disagree. Below is a good example of the chart of MDCO and how it appeared in our 9/17 Healthcare Note. This name trades very taut, hallmark bullish characteristics, and is doing just about everything a bull could ask for. It demonstrated very good action POST breakout from a 37.57 double bottom pivot taken out on 8/26, which then morphed into a bull flag. That was taken out on 9/20, and proceeded to jump 5.5% on 9/25 on huge volume, and that gap was filled this Monday and it has ground out further gains this week advancing more than 3% headed into Friday. It sits just 4% off most recent 52 week highs, and if the healthcare group can get going this one should be a big beneficiary.