Since this sector has outperformed for the last few years, MoneyShow’s Tom Aspray examines the charts to see whether it still makes sense to be in this sector or if it’s time to move on.
The current fragile state of the US stock market was highlighted Monday when the S&P futures dropped 15 points in 60 minutes as stocks dropped in an apparent reaction to an article in the Financial Times on what the Fed might do.
Stocks in Asia were mixed overnight and are slightly higher in Europe as are the US futures. Today, we get the latest reading on the Consumer Price Index and Housing Starts along with the beginning of the FOMC meeting.
From a technical perspective, it is still my view that it would take “two consecutive days of solid price gains along with strong A/D numbers” to indicate that the correction was over.” Clearly volatility has picked up but it is difficult to determine whether the bullish sentiment has decreased enough to support a new phase.
The healthcare sector has exceeded almost all expectations in the past few years. As I noted last December, the sector broke 12-year resistance in 2012, which suggested it should also be a strong performer in 2013. Many are now wondering whether they should stick with the healthcare sector, take profits, or look for new health care stocks to buy.
Chart Analysis: The daily chart of the DJ Health Care Sector (DJUSHC) shows that it broke its daily uptrend, line a, in early June but has bounced nicely from support at line b.
The Select Sector SPDR Health Care (XLV) is up over 21%, so far, this year and the weekly chart shows that the starc+ band was tested a few weeks ago.
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