XLV fell 2.3% last week after reversing from 200-DMA ($131.74) resistance. Support remains the $124 to $125
range. Should this level break, the next level is ~$119. We recommended shifting from underweight to overweight
the sector in late August with that view still unchanged. The RS line continues to move higher versus the S&P 500
and Nasdaq.
Author: Raj Gupta
Market View
The U.S. market is in a Downtrend. The S&P 500 and Nasdaq gapped down below last week’s lows killing the rally attempt. There is now no clear level of support above year-to-date lows (S&P 500: 3,636; Nasdaq: 10,565). The 10- and 21-DMA are again rolling over and will act as near-term resistance should indices rebound.
O’Neil Health Care Weekly
XLV gained 4.4% last week, narrowly regaining its 50-DMA ($130.02), but still trading below heavy resistance between its 200-
DMA ($131.83) and ~$135. We view support between $124-$125. The relative strength line (vs S&P 500) is still trending upwards, warranting an equal to overweight sector positioning.
Market View
The U.S. market is in a Rally Attempt. The S&P 500 and Nasdaq held above a new low (S&P 500: 3,886; Nasdaq: 11,471) for three sessions, regaining multiple key moving averages Friday. The market status can now be upgraded to Confirmed Uptrend should a follow-through day (+1.7% in higher day/day volume) occur as early as Monday. Conversely, the market status will shift back to Downtrend should recent lows undercut.
Market View
The U.S. market is in a Downtrend. The S&P 500 and Nasdaq closed below their respective 50-DMA (S&P 500: 4,020;
Nasdaq: 12,030) on Tuesday, resulting in a downgrade of the market status. That level is now acting as near-term
resistance, though multiple moving averages are set to cross below in the coming days.
O’Neil Health Care Weekly
XLV fell 4.2% last week, breaking below all key moving averages including the 50-DMA at $129.78. This will now act as near-term
resistance. We view support between $124 to $125. Though the relative strength line (vs S&P 500) has flattened over the last two weeks, it
has not made a higher high, still warranting an equal to underweight sector positioning. Should broader market weakness persist, this
recommendation will likely change to overweight given the defensive profile of Health Care.
Market View
The U.S. market is in an Uptrend Under Pressure. The S&P 500 and Nasdaq fell for a second straight week, still
pulling back from 200-DMA resistance and now approaching a rising 50-DMA (S&P 500: 3,996; Nasdaq: 11,943). The
market status will be downgraded to Downtrend should indices close below this key level of support. The distribution day
count stands at four and five, respectively, with one day expiring on each index Monday.
O’Neil Health Care Weekly
XLV pulled back 52bps last week, trading relatively flat and holding above all key moving averages. We see nearterm support at ~$132 followed by the 50-DMA at $129.15. Near-term resistance is ~$134. Though the relative strength line (vs S&P 500) did tick up last week, it has not made a higher high, still warranting an equal to underweight sector positioning. Should broader market weakness persist, this recommendation will likely change to overweight given the defensive profile of Health Care.
Market View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq pulled back from 200-DMA (S&P 500:
4,321; Nasdaq: 13,447) resistance this week following four straight weeks of strong gains. The next level of support below
the 10-DMA is the rising 21-DMA (S&P 500: 4,157; Nasdaq: 12,560). The distribution day count stands at three and five,
respectively, with one day expiring on the Nasdaq next week.
O’Neil Health Care Weekly
XLV gained 1.6% last week clearing above the 200-DMA ($132.23), but still below price resistance at ~$134. There are
multiple moving averages between $129-$132 to act as near-term support. The relative strength line continues to trend
lower over the trailing six-weeks, still warranting an equal to underweight sector positioning.