Healthcare Stocks Are Strong as Mid-Term Elections Begin to Confirm the Democrat’s Agenda in the Sector is Underway
Broad industry-wide price action in healthcare stocks was confirmed with the Democrats winning the House. The mid-term elections focused on several issues, with health care at the top of the list. As a result, several prominent healthcare providers and medical device makers populate the watch list for the week.
All sectors are strong. Healthcare just happens to be at the top of the list, ranked by performance. The communications sector (XLC) was the weakest.
Healthcare Stocks – Bullish Cycle
The bullish cycle in the Healthcare (XLV) Sector stocks started two weeks ago, as the group consolidated at the 200d. Price action is presently above an area of support, with the post-mid-term election thrust closing above VBP resistance. A flag is forming.
MACD suggests bulls are in control, as it remains above the signal line. The histogram is building above its zero-line. In addition, the Coppock cycle is bullish short and intermediate-term.
Healthcare Sector Industry Groups
Top 10 stocks in the group (ranked by performance) include QHC, BIOS, GTS, AMED, ADUS, CNC, TVTY, MOH, HMSY, ANTM, HCA. Previous candidates PFE, LLY, and MRK were strong last week.
Bond Stock Ratio
All things considered, equities are outperforming bonds as the bond stock ratio was rejected at the weekly 65ma. Yields were higher.
As a result, all sectors illustrated in the sector breakdown at the beginning of this post should continue higher. Look for confirmation in fresh new highs and fewer new lows.
Breakouts will most likely continue if institutions and fund managers buy up stocks in pursuit of year-end bonuses. Healthcare is one of those targeted sectors where we can clearly see activity.
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Happy Trading,
Vinny
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