The U.S. market remains in a Confirmed Uptrend. The S&P 500 gained 70 bps for the week however the Nasdaq reversed off highs and declined 60 bps. Support for the S&P 500 is at its 10-DMA (4,509), followed by the 21-DMA (4,459). The Nasdaq closed slightly below its 10-DMA (14,061), with the next level of support at its 21-DMA (13,872). The distribution day count stands at five and four, respectively, with two days expiring on each index next week.
Author: Raj Gupta
O’Neil Health Care Weekly
XLV rose 209bps last week, regaining both its 50-DMA ($130.87) and 200-DMA Friday on the back of a positive UNH print reaction. The next level of immediate resistance is at $133.25 followed by $135.81. Though its RS line has bounced back from lows, it has yet to make a higher high, still warranting an underweight sector positioning. Though UNH responded favorably to results, the overall quarter was not that impressive. Leadership is still mostly tied to Hospitals, Distribution and Medical Products. Managed Care is still ranked 182 of 197 O’Neil Industry Groups.
Market View
The U.S. market status remains in a Confirmed Uptrend. S&P 500 and Nasdaq rose 2.4% and 3.3%, each rising to
fresh 52-week highs. The S&P 500 has some minor possible resistance at 4,512 (April 2022 reversal lower), while
Nasdaq broke above the previous resistance at 14,032. We see the next levels of resistance ~3% above for each at
4,637/14,500, respectively. Indices continue to trend above their rising 10-DMA support (-2%). The distribution day count
stands at five and three, respectively.
O’Neil Health Care Weekly
XLV declined 280bps last week and broke below its 50-and 200-DMA. Next support is at $126, followed by $123.60. Its RS line made a lower low, warranting an underweight sector positioning. Last week, Services led while Hospitals and Long-term care lagged.
Market View
The U.S. market status remains in a Confirmed Uptrend. Indices continue to consolidate on below average volume. The S&P 500 and Nasdaq are slightly below their 10-DMA (4,405/13,656) followed by the next level of support at the rising 21-DMA (4,367/13,506). The distribution day count stands at five and three respectively with one day expiring on the S&P 500 next week.
O’Neil Health Care Weekly
XLV rose 55bps last week and regained its 50-DMA Friday. The next level of immediate resistance is at the previous high of $133.25 followed by $135.80. Despite the index regaining its 50-DMA, its RS line is near lows, warranting an
underweight sector positioning. Last week, we saw breakouts in CROs (MEDP, IQV, ICLR) driven by a recovery in
biotech funding. The total funding is now at 95% of pre-covid levels. Overall, Medical Distribution (ABC, MCK, CAH), despite being extended, continues to lead, while Hospitals and Outpatient Care ideas (HCA, UHS, THC, SEM, ACHC) are also breaking out or building their right sides on improving labor costs and higher admission rates.
Market View
The U.S. market status remains in a Confirmed Uptrend. Both S&P 500 and Nasdaq gapped up on Friday and closed strong for over 2% weekly gains. The S&P 500 closed above immediate resistance near 4,448, while for the Nasdaq it remains just below the peak from two weeks prior near 13,864. The distribution day count stands at four and three, respectively.
O’Neil Health Care Weekly
XLV declined 16bps last week and is now testing support at its 50- and 200-DMA (~$131). It has resistance at ~$134,
followed by $135.81. Though its RS line has lifted from lows, it has yet to make a higher high, still warranting an
underweight sector positioning. Medical Distribution (ABC, CAH, MCK), though now extended, continues to lead, while multiple Hospitals (HCA, SEM, UHS) are in position to breakout. Meanwhile, XBI and Biotech, has pulled back directly to 50-DMA support. Dexcom (DXCM) had its Investor Day after the close Friday. Though there were positive updates, their base case guidance was largely in-line with consensus.
Market View
The U.S. market status remains in a Confirmed Uptrend. The S&P 500 and Nasdaq pulled back 1-2% off 52-week
highs and are testing 10-DMA support (4,357/13,514) followed by the rising 21-DMA (4,308/13,289)). The distribution day
count stands at four and three respectively with one day expiring on each index next week.
O’Neil Health Care Weekly
XLV rose 137 bps last week regaining both its 50- and 200-DMA (~$131), which will now act as near-term support. It has immediate resistance at ~$134, followed by $135.81. Despite the rally, its RS line remains near lows, warranting an underweight sector positioning. Medical Services led by Hospitals are back on the right side of their respective bases following commentary by UNH which flagged elevated volumes of elective surgeries.