XLV declined 1.5% last week, consolidating strong 4-week gains just above 200-DMA ($130) support. The 50-DMA is
trading at $126.35. Resistance is $134.47. The relative strength line (vs. S&P 500) continues to rise, still warranting an
overweight sector positioning.
Author: Raj Gupta
Market View
The U.S. market remains in an Uptrend Under Pressure. The S&P 500 and Nasdaq pulled back sharply from resistance at their 100-DMA (3,897) and 50-DMA (11,123) respectively. Indices are back below all key moving averages as the distribution day count has increased to four and two. The market status will be downgraded to a Downtrend should the S&P 500 close below the follow through day low (3,647) however price support is not until YTD lows at 3,491 and 10,088 respectively.
O’Neil Health Care Weekly
XLV rallied nearly 5% last week, outperforming the broader market and regaining all key moving averages in the process.
Near-term support is now the 200-DMA ($130) followed by the rising 10- and 21-DMA. Near-term resistance is the August
high of $134.47. The relative strength line (vs. the S&P 500) has yet to make a lower low, indicating an overweight sector
positioning is still warranted.
Market View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq rallied for a second straight week, progressing instantly higher post the October 21 follow-through day (FTD). The S&P 500 closed above its 50-DMA (3,842), which will now act as initial near-term support, while the 100-DMA (3,903) is now the next level of logical resistance. The Nasdaq is still trading below both the early October high of 11,230 and the rolling 50-DMA (11,314), which will coincide to act as near-term resistance. The distribution day count stands at two, and one, respectively.
O’Neil Health Care Weekly
XLV gained 2.1% last week and is now trading at its 50-DMA ($126.56). Should this level clear, the next level of resistance
is the 200-DMA ($130.16). Support remains ~$119. The RS line has begun to pullback but has yet to make a lower low.
Should that occur this week, we recommend moving more towards equal weight. The sector tends to underperform
sharp rallies off oversold levels.
Market View
The U.S. market has been upgraded to a Confirmed Uptrend. The S&P 500 and Nasdaq staged a Day 7 follow-through today, each jumping over 2% in higher day/day volume. Both indices closed back above their respective 10- and 21-DMA, with the next level of resistance at October highs (S&P 500: 3,806; Nasdaq: 11,230) followed by the rolling 50-DMA (S&P 500: 3,887; Nasdaq: 11,517).
O’Neil Health Care Weekly
XLV gained 1% last week but was unable to regain its 50-DMA ($127.19) after finding resistance at that level on Friday.
Support remains ~$119. The RS line versus both the S&P 500 and Nasdaq continues to make new highs, still warranting
an overweight sector positioning. This recommendation has been unchanged since September 6.
Market View
The U.S. market is in a Downtrend. The S&P 500 and Nasdaq found resistance near their respective 21-DMA (3,717)
and 10-DMA (10,646) after staging a strong upside reversal on Thursday. If indices hold above the low from October 13th
(S&P 500: 3,491, Nasdaq: 10,088) , the market status will shift to Rally Attempt after the close on Monday with a possible
follow-through day (+1.7% in higher d/d volume) as soon as Tuesday. Below YTD lows from October 13th , the next level
of price support is at 3,393 and 9,838 on the S&P 500 and Nasdaq, respectively.
O’Neil Health Care Weekly
XLV reversed sharply from 50-DMA ($128) resistance Friday, but still managed to close 1.2% higher for the week and
narrowly above the September low of $120.70. Should this level break, the next level of support is $118.75. XLV’s relative
strength (RS) line versus the S&P 500 and Nasdaq continues to rise, still warranting an overweight sector positioning.
Market View
The U.S. market remains in a Rally Attempt. Despite Friday’s sharp gap lower, indices are still holding above last week’s lows (S&P 500: 3,584; Nasdaq: 10,572) keeping the attempted rally alive. A follow-through day (+1.7% in higher d/d volume) above these lows would still upgrade the market status to Confirmed Uptrend, while an undercut would kill the attempt. Near-term resistance is again the rolling 10-DMA (S&P 500: 3,720; Nasdaq: 10,967). The next level of support below year-to-date lows on the S&P 500 is 3,393, while the next level on the Nasdaq is 10,519, followed by 9,838.