The S&P500 is green this morning, no small part due to the rotation into the healthcare sector.
The biotech, pharmaceutical and medical device makers should follow through today as XLV is green again this morning in pre-market trading.
SPY pulled back to the 9ema and held fast. Given the fact that TICK cumulative is rising, we know that institutions keep buying more stocks on the uptick than they are selling on the downtick. Therefore, we need to assume rotation.
Our job is to identify which sectors are receiving the capital flows, then look for winning stock picks exhibiting good setups, that are ready to blast off. The whole healthcare sector is ripe, as this weekly chart shows. There is no overhead supply at these lofty levels, so we need to keep an eye out for pivot highs or weakness. Until then, look for setups in the industry groups within the healthcare sector.
The stocks showing up on the highest percent change lists typically give us further insight into the areas to focus on. Use the trade of the day setup for initial entry.
Sectors receiving flows this morning: XBI IBB IHE XLV XLE XLF
For more on finding winning stock picks and a strategy based approach to the markets, check us out at The Closing Print.
Have a great day,
Vinny