The U.S. market remains in a Confirmed Uptrend. The S&P 500 continued a V-shaped recovery and closed 1.5% higher for the week, ending just 1% off all-time highs (5,670). Support is at the 10-DMA (5,536) and then the 21-DMA (5,497). The Nasdaq rose 1.4% for the week, retaking the 50-DMA (17,639), which may now act as support. It remains about 4% off all-time highs (18,671). The distribution day count is at zero and one, respectively.
Author: Raj Gupta
O’Neil Health Care Weekly
XLV gained 1.9% last week, moving back into all-time highs. Despite strong absolute action, its RS line has begun to pullback given
the rebound in the broader market. We still recommend an overweight sector positioning as the RS line has yet to make a lower low
and ideas continue to act well. Look for immediate support at the rising 21-DMA ($149.73), followed by the 50-DMA ($147.75).
Market View
The U.S. market was shifted to a Confirmed Uptrend. Each index staged a follow-through day after posting strong weekly gains.
The S&P 500 has regained its 50-DMA (5,464) and is testing price resistance along ~5,566. The Nasdaq is slightly above its 50-DMA
(17,585) and attempting to settle above this key moving average. No distribution days on either index.
O’Neil Health Care Weekly
XLV declined 58bps last week, remaining near all-time highs with a sharply rising RS line. We continue to recommend an overweight sector positioning. Look for immediate support at the 21-DMA ($148.50), followed by the 50-DMA ($147.01).
Market View
The U.S. market has been shifted to a Rally Attempt. The S&P 500 and Nasdaq were down very slightly for the week, reversing from sharp losses to close near the highs of the week. The S&P 500 broke and then retook the 100-DMA (5,313), while the Nasdaq closed back above March highs of ~16,540 after testing the 200-DMA (15,892). Indices have immediate resistance at their 21-DMA (5,401/17,160), followed by the 50-DMA (5,446/17,545) which is 2–5% above current levels. We will shift the market to a Confirmed Uptrend if a follow-through day occurs (+1.7% or more on higher d/d volume without recent lows being undercut).
O’Neil Health Care Weekly
XLV advanced 60bps last week, remaining at all-time highs with a sharply rising RS line. Though we expect the sector to pullback given broad market weakness, we believe it will continue to outperform the market, warranting an overweight sector positioning. Look for immediate support at its 21-DMA ($148.76), followed by the 50-DMA ($146.62).
Market View
The U.S. market is in a Downtrend. Indices declined 2-3% due to broad-based distribution. The S&P 500 is testing 100-DMA (5,307) support while the Nasdaq breached its 100-DMA (16,878) and is testing price support along ~16,500, which coincides with the top of the prior base. Stay patient and wait for indices to settle and attempt a new rally.
O’Neil Health Care Weekly
XLV advanced 1.4% last week, bouncing off its 21-DMA ($147.75) and back into new highs. Its RS line continues to rise from lows, warranting an equal- to overweight sector positioning.
Market View
The U.S. market was shifted to a Downtrend. The S&P 500 fell 0.8%, while the Nasdaq dropped 2.1% for the week. The S&P 500
fell to below its 50-DMA for the first time in nearly three months before slightly retaking it to end the week. Next support could be
between 5,291 (100-DMA) and 5,340 (prior base highs). The Nasdaq broke and closed below the 50-DMA with next support at the
100-DMA (16,820).
O’Neil Health Care Weekly
XLV rallied further into all-time highs early last week, but ended the week down 27bps after a sharp pullback on Thursday to 21-DMA ($146.79) support. Its RS line continues to rise from lows, warranting an equal-weight sector positioning.