Have you noticed how everyone forgot about healthcare stocks, asks JC Parets of AllStarCharts.com.
All it took was two years of no progress for everyone to lose track of just what a monster this trade has been for so long. Just to put things in perspective, here's what Healthcare (XLV) as a sector has done over the past 20 years.
Notice how it goes from the lower left to the upper right. We call those uptrends. Keep in mind that Healthcare is the largest weighting in the world's most important stock market index—the Dow Jones Industrial Average (21% weighting) and the second largest component in the S&P 500 (SPX), after Tech.
If you think the stock market indexes are going to make new highs, this sector is mathematically going to be one of the ones most likely to help get it there. If you do NOT think the stock market indexes are going to make new highs, then you better be watching this sector. Because if it gets going, you're going to get your face ripped off.
Here's the biggest component of the Healthcare sector coming in at half a Trillion dollars in market cap. This is one of the ten largest companies on the planet. Notice the sideways range in the past couple of years in UnitedHealth Group (UNH):
Amgen is another one. Here's Amgen Inc. (AMGN) with its Fibonacci Extensions going back to the 1990s presenting us with a favorable risk vs reward:
There are certainly winners and losers in this group. And while there are some losers, you'll notice how the strongest names are already pushing up close to new all-time highs.
To learn more about JC Parets, please visit AllStarCharts.com.
