Market View

The U.S. market is in a Confirmed Uptrend. The S&P 500 and Nasdaq jumped 2–3% this week and regained their respective 50-DMAs (5,583; 17,493 ) along with an improvement in quality ideas setting up. The next level of resistance is at the 200-DMA (5,746; 18,317).

O’Neil Health Care Weekly

XLV staged an upside weekly reversal, closing up 1.9% and just below 21-DMA ($138.39) resistance. The next level above is the
rolling 50-DMA ($143.34). Despite the rally, its RS line made a lower low as XLV underperformed post Tuesday’s follow-through day
(FTD). We now recommend an equal- to -underweight sector positioning.

O’Neil Market View

U.S. Market

 

The U.S. market is in a Confirmed Uptrend. On Tuesday April 22, the S&P 500 and the Nasdaq staged follow-through days (FTDs) on the 11th day off April 9 lows. We shifted indices back into a Confirmed Uptrend for the first time since February 27. Indices rose 4.6% and 6.7%, respectively, for the week. Each also managed to close above their 21-DMA (5,415; 16,855), which will now act as immediate support. Indices are attempting to retake March lows and then may face resistance near their declining 50-DMA (5,636; 17,734)

O’Neil Health Care Weekly

XLV declined 1% last week, still trading below all moving averages including key near-term resistance at the 21-DMA ($139.84). The
next level of support is ~$131, before YTD lows of $129.66. Despite pulling back, its RS line has yet to make a lower low, still
warranting an equal-weight sector positioning.

Market View

The U.S. market is in a Rally Attempt. The S&P 500 and the Nasdaq were down 1.5% and 2.7%, respectively, this week. Both traded inside the range from the prior week but closed near the lows of the week after being rejected from resistance at their 21-DMA (~4,430, ~16,900). The opportunity of a follow-through day, i.e., gains of 1.7% or higher on higher d/d volume, remains open as long as April 7 lows (4,835, 14,784) are not breached.

O’Neil Health Care Weekly

XLV gained 1.2% last week, finding support at ~$130, but still trading below all key moving averages. Initial near-term resistance is the
falling 21-DMA ($141), followed by the 50-DMA ($145) and 200-DMA ($147). XLV outperforms broader indices when they trade lower,
but as we saw last week, widely underperforms any recovery. Despite underperforming last week, we still recommend an equalweight sector positioning as its RS line has yet to make a lower low and major indices have yet to stage a follow-through day
(FTD). Should a FTD take place this week, we will likely shift our rating back to underweight.

Market View

The U.S. market is in a Rally Attempt. Indices surged higher off their respective lows (S&P 500: 4,835, Nasdaq:14,784) this week but didn’t meet the criteria to upgrade the market status. The window for a follow-through day (+1.7% on higher volume D/D) remains open. The S&P 500 and Nasdaq have regained their 10-DMA (5,354, 16,629) with the next level of resistance at their declining 21-DMA (5,479, 17,089).

O’Neil Health Care Weekly

XLV declined 6.4% last week, with the majority of damage occurring Friday. The index has now broken through YTD lows with the next
level of support at ~$132 (-2.5%). Despite Friday’s 5.5% drop, XLV’s RS line continues to rise, warranting an equal-weight sector
positioning.

O’Neil Market View

U.S. Market

The U.S. market was shifted back to a Downtrend from Rally Attempt. The S&P 500 and Nasdaq were down 9% and 10%, respectively, for the week. They both undercut Monday’s lows, the lows from mid-March, and both August/September 2024 lows of bases that had been established then. The weekly losses were the largest since March 2020. The S&P 500 has its next level of support just below ~5,000 from Q1 2024 lows. The Nasdaq’s base lows from Q1 2024 was near 15,200. Indices are more than 10% below their 21-DMA and 8% below what had been prior support at March lows (5,405, 17,238). Further, the Nasdaq had a “death cross” with the 10-WMA crossing below the 40-WMA, for the first time since March 2023. The S&P 500 narrowly missed this occurring but it is almost a certainty in the coming weeks

O’Neil Health Care Weekly

Sector Thoughts
XLV declined 1.4% last week, reversing from 200-DMA ($147.69) resistance. The next level of support is $143.41, followed by $140
and $135.95. Its RS line continues to hold up well, still warranting an equal-weight sector positioning