Best Offense Is Good Defense:

Within the healthcare arena market participants can find a little bit of everything. If they want mature dividend plays they can grab some conservative pharma. If they yearn for volatility they can look for exposure to biotech. Then there is more stability usually with healthcare providers. Then there are medical equipment and supply stocks. Of course, not all act this way and there will be leaders and laggards within each of these niche spaces. In the “safe” pharma names for example GSK is now yielding 6.5% as it looks for its ninth WEEKLY loss in the last 10. But below we look at the “risk on” relationship in healthcare at the moment through the lens of the ratio chart comparing pharma to biotech. The former, as one can see has been lagging, but that could be about to change with its recent break above a bear flag. A lot will depend on top holding MCK that right now is sporting a bear flag pattern. A CLOSE below 340 would carry a measured move to 310, roughly at its 200-day SMA now. LLY also needs to get above a third lower high here since a bounce off the very round 300 number at resistance within a bearish descending triangle. “Defense” is not always as it seems.

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