Pharma Takes The Baton:

There seems to be endless conversation about the growth/value correlation. Chatter that declares value should start outperforming growth has fallen on deaf ears for the most part. If that were to take place, one area where it could materialize is within healthcare. Below is the ratio chart comparing pharma to biotech with the PPH:XBI (PPH is an illiquid instrument but gives a good representation of what is happening). Pharma still has some work to do according to the chart below, but on a YTD basis, obviously a small sample size, the PPH is up double what the XBI is. Wednesday the PPH rose 1.7%, AFTER Tuesdays rise of 1.8%, and it is moving robustly away from a bull flag breakout above a 64.50 pivot. We know the best breakouts tend to work right away, so this is a very positive development. Top component BMY itself has broken away from its own bull flag above a 64 trigger too, and LLY has lost ground just ONE day this year so far. PFE, which rounds out the top 3, did fill in an upside gap from the 7/29/19 session, so it could take a breather here.

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