O’Neil Health Care Weekly

XLV gained 15bps last week, briefly regaining its 200-DMA ($139.02) Thursday before falling back below that level Friday. Near-term
support remains the rising 21-DMA ($136.93), followed by the 50-DMA ($134.96). The 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 and hold above its
200-DMA before recommending a shift to equal weight.

O’Neil Market View

U.S. Market

 

The U.S. market remains in a Confirmed Uptrend. Indices broke out of a sideways range and into all-time highs as breadth across leadership remains strong. The first level of support is at the rising 21-DMA (6,464/21,579 ) The distribution day count stands at five and three, respectively, with one day set to expire on each index on Monday.

 

O’Neil Health Care Weekly

XLV gained 34bps last week, consolidating just below rolling 200-DMA ($139.12) resistance. Near-term support is the 21-DMA
($136.06) followed by the 50-DMA ($134.63). The 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.

O’Neil Market View

U.S. Market

 

The U.S. market remains in a Confirmed Uptrend. The S&P 500 finished up 0.3% in choppy trading for the week and continues to bump into some resistance around ~6,500. The Nasdaq rose ~1.1%, with the next level of resistance near its August highs (~21,804). Support is near their 10-DMA (6,466/21,541), followed by their rising 21-DMA (6,431/21,425). The distribution day count currently stands at six and four, respectively.

O’Neil Health Care Weekly

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.

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.