XLV rallied for a fourth straight week, gaining 2% and now testing all-time high resistance at $159.64. Since gapping higher in early
October, the index has been trending constructively off the 10-DMA ($154.88) and 21-DMA ($151.81). Its RS line continues to rally
from lows, warranting an equal – to – overweight sector positioning.
Author: Raj Gupta
O’Neil Market View
U.S. Market
The U.S. market was moved to a Rally Attempt from Downtrend. The S&P 500 and the Nasdaq gained 3.7% and 4.9%, respectively, for the week. Indices are up five days in a row after finding support at their 100-DMAs and have now retaken and held above their 21-DMA (6,735/22,965) and 50-DMA (6,725/22,950). The window for a follow-through day (+1.7% on higher d/d volume) remains open, or the market could be shifted to an Uptrend if either index closes at a new high.
O’Neil Health Care Weekly
XLV rallied 1.8% last week, outperforming all sectors and clearing resistance at $155.02. The next level is $157.59 before the all-time
high of $159.64. Since gapping higher in early October, the index has been trending constructively off the 10-DMA ($151.51) and 21-
DMA ($149.12). Its RS line continues to rally sharply from lows, warranting an equal – to – overweight sector positioning.
O’Neil Market View
U.S. Market
The U.S. market has been downgraded to Downtrend from Uptrend Under Pressure. This week, the S&P 500 and the Nasdaq declined 1.9% and 2.7% respectively, closing below their 50-DMA (6,711/22,881) for the first time in seven months. Support is now the 100-DMA for each (6,548/22,057). A follow-through day (>=+1.7% on higher d/d volume on either index or both) can occur on Wednesday at the earliest if Friday’s intraday lows (6,522/21,898) are not undercut.
O’Neil Health Care Weekly
XLV gained 3.9% last week, rallying strongly from 21-DMA ($146.98) support and above resistance at $150.32. The next levels are
$155.02, $157.59 and new highs at $159.64. Its RS line continues to rally sharply from lows, warranting an equal-weight sector
positioning.
O’Neil Market View
U.S. Market
The U.S. market remains in an Uptrend Under Pressure. The S&P 500 and Nasdaq were very volatile due to a sell-off midweek followed by an upside reversal on Friday. Indices are facing resistance at the 21-DMA (6,772; 23,191) with support at the 50-DMA (6,704; 22,835). The distribution day count stands at two and six, respectively, with one day expiring on Monday at the close on the Nasdaq.
O’Neil Health Care Weekly
XLV gained 1.3% last week, holding 21-DMA ($144.35) support. Near-term resistance is at ~$148, followed by $150.32. With the index
back above key moving averages, and the RS line lifting from lows, we recommend an equal-weight sector positioning.
O’Neil Market View
U.S. Market
The U.S. market has been shifted to an Uptrend Under Pressure. The S&P 500 and the Nasdaq declined 1.6% and 3.0%, respectively, for the week, breaching their 21-DMA. They each bounced strongly from their 50-DMA on Friday, which is now key support (6,670/22,665). The distribution day count stands at three and five, respectively. One distribution day on both indices is set to expire over the coming week.
O’Neil Health Care Weekly
XLV fell 1.2% last week and is now testing 21-DMA ($143.63) support before the rising 50-DMA ($140.39). Near-term resistance is at
~$148, followed by $150.32. With the index back above key moving averages, and the RS line lifting from lows, we recommend an
equal-weight sector positioning.
O’Neil Market View
U.S. Market
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and the Nasdaq gapped up ~1% and 2.2% respectively, and continue to consolidate above 10-DMA support (6,836/23,420), followed by the 21-DMA (6,752/23,109). The distribution day count stands at three and five, respectively.
Over the last five sessions, Technology (+2.3%) outperformed, followed by Retail and Transportation jumping +1%. Multiple sectors declined led lower by Consumer Staple (-3.7%) and Utility (-2.5%). Basic Material and Capital Equipment fell 1%.
