Can One Hide Out In Healthcare?

We are well aware of the markets weakness in February, and many are anticipating that possibility. Of course there are other obvious factors that are going on now, but the chart below of the XBI has a doubled edged sword to it. February has actually CLOSED the month higher than where it started 3 of the last 4 years. It is a very small sample size, but the cynics will point to the end of the best 4 month seasonality streak of the last 4 years. As always astute stock pickers will try to identify alpha to beat sector peers, and that will come in handy again. The XBI alone is higher by 60% since touching the very round par number last September, and is recording some dubious candlesticks here, so it may be judicious to take a little off the table. That being said some leaders have been punished harshly, and remember when the selling is extreme all names get taken to the woodshed. Some will fall more than they should deservedly so. Perhaps TWST is an example, where Wednesday it bounced precisely off its upward sloping 50 day SMA. At the very least it is a good spot to play against, as a doji candle (often indicates weakening of prevailing trend) was registered after a 70 handle slide top to bottom last 5 sessions. 

This article requires a Chartsmarter membership. Please click here to join.