XLV fell 54bps last week, finding resistance at its rolling 200-DMA ($139.31). Near-term support is at the rising 21-DMA ($135.41)
followed by the 50-DMA ($134.28). Its RS line has come off lows, but remains in a longer-term downtrend, still warranting an
underweight sector positioning. We will be looking for XLV to regain its 200-DMA before recommending a shift to equal weight.
Author: Raj Gupta
O’Neil Health Care Weekly
XLV gained 1.5% last week, closing just below resistance at the rolling 200-DMA ($139.60). Support is at the rising 21-DMA ($134.53).
Its RS line has rallied from lows, but remains in a longer-term downtrend, still warranting an underweight sector positioning. We will
be looking for XLV to regain its 200-DMA before recommending a shift to equal weight.
O’Neil Market View
U.S. Market
The U.S. market is in a Confirmed Uptrend. Indices are at or near all-time highs after accelerating higher on Friday despite pulling back earlier in the week. The S&P 500 and Nasdaq regained their 10-and-21-DMAs (6,415/21,249) and continue to chop around in a sideways range for the last three weeks. The distribution day count stands at six and three, respectively.
O’Neil Health Care Weekly
XLV gained 4.7% last week, regaining its 50- and 100-DMA ($135.07). The next major level of resistance is the rolling 200-DMA
($139.87). Its RS line has rallied from lows, but remains in a longer-term downtrend, still warranting an underweight sector
positioning. We will be looking for XLV to regain its 200-DMA before recommending a shift to equal weight.
Market View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq gained 0.9% and 0.8%, respectively, for the week. Each index made a fresh all-time high earlier in the week. The first level of support is at the rising 10-DMA (6,391/21,397), followed by the 21-DMA (6,359/21,194). The distribution day count stands at six and two, respectively, with one added Friday on the S&P 500, and one set to expire on the S&P 500 after Monday’s close.
O’Neil Health Care Weekly
XLV fell 74bps last week after falling ~4% the week prior, and is now testing year-to-date low support at $127.35. It remains below all
key moving averages with an RS line near all-time lows, still warranting an underweight sector positioning.
O’Neil Market View
U.S. Market
The U.S. market remains in an Uptrend Under Pressure. The Nasdaq closed just below all-time highs (21,457), which would have been the trigger to shift the market back into Confirmed Uptrend. For the week, the S&P 500 and Nasdaq rose 2.4% and 3.9%, respectively. The S&P 500 still has minor resistance at prior highs (6,339). Support is at their 10-DMA (6,340/21,101), followed by their 21-DMA (6,307/20,924). The distribution day count stands at four and one, respectively, after one distribution day expired on each index on Friday’s close.
O’Neil Health Care Weekly
XLV fell 3.9% last week, closing back below its 50-DMA ($133.86) and near YTD lows. Support is $127.35 to $130. Its RS line is again
near all-time lows, warranting an underweight sector positioning.
O’Neil Market View
U.S. Market
The U.S. market has shifted to an Uptrend Under Pressure. Indices staged a sharp downside reversal near all-time highs, declining over 2% and closing below the 21-DMA (6,284/20,764) for the first time since the April 22 follow-through day. The next level of support on the S&P 500 and Nasdaq is at the rising 50 DMA (6,130/20,290), which is poised to coincide with the top of the prior base consolidation. The distribution day count stands at four and two, respectively.
O’Neil Health Care Weekly
XLV rallied 3.5% last week, closing back above its 50-DMA ($133.78), but still below resistance at its falling 100-DMA ($137.26) and
200-DMA ($141.34). Though its RS line did rally slightly from multi-year lows last week, it remains in a downtrend and still warrants
an underweight sector positioning.