XLV gained 1.3% last week, regaining its 50-DMA (~$135) which will now act as near-term support above the rising 21-DMA
($134.30). Its RS line has rallied off lows, however, it remains near all-time lows, still warranting an underweight sector positioning.
We will be looking for XLV to settle above its 50-DMA and for a further rise in its RS line before recommending an equal weight
positioning.
Author: Raj Gupta
O’Neil Market View
U.S. Market
The U.S. market is in a Confirmed Uptrend. The S&P 500 and Nasdaq fell 0.4% and 0.6%, respectively, last week. Indices are 2–3% off their all-time high (6,147; 20,204), with primary support at rising 21-DMAs (5,921; 19,172). The distribution day count stands at five and three, respectively, after the S&P 500 added one on Friday.
This week, all sectors except Consumer Staple closed above their 50-DMA and all but Consumer Staple, Health Care, and Transportation above their 200-DMA.
O’Neil Health Care Weekly
XLV gained 1.3% last week and is now testing key resistance at its rolling 50-DMA ($135.83). Near-term support is now the rising 21-
DMA ($133.39) followed by ~$130. Its RS line remains near multi-decade lows, still warranting an underweight sector positioning.
O’Neil Market View
The U.S. market is in a Confirmed Uptrend. Indices rose 1–2% this week and are approaching all-time highs ( 6,147, 20,204) which is less than ~3% away. The first level of support for the S&P 500 and Nasdaq is at their 10-DMA (5,935; 19,254). The distribution day count stand at four and three, respectively, with one day expiring on the S&P 500 next week.
O’Neil Health Care Weekly
XLV gained 1.8% last week, rallying from YTD lows and back into rolling 21-DMA ($133.40) resistance. Though the sector continues
to trade near long-term support at ~$130, its RS line remains near all-time lows, still warranting an underweight sector positioning.
O’Neil Market View
U.S. Market
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq rose 1.9% and 2.0%, respectively, for the week. Indices are still testing resistance near 5,970/19,200 and have immediate support at their rising 21-DMA (5,802/18,617). The distribution day count remains at three and two, respectively.
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O’Neil Health Care Weekly
XLV fell over 2% last week after hitting resistance at the falling 21-DMA ($133.96). Though the index is trading near support between
$127-$130, its RS line remains near all-time lows, still warranting an underweight sector positioning.
O’Neil Market View
U.S. Market
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and the Nasdaq declined ~2% this week and
breached their respective 10-DMA (5,838, 18,794). The next level of support for both indices is near their converging 100-
and 200-DMA (5,773, 18,413). The distribution day count on the S&P 500 and the Nasdaq increased to three and two,
respectively.
O’Neil Health Care Weekly
Sector Thoughts
XLV hit new 52-wk lows last Wednesday before rallying to close up 31bps on the week. The range of support is between $127.35 to $130, with near-term resistance still at the falling 21-DMA ($135.11; +1.5%). Though the sector is again trading near long-term support, its RS line is now hitting its lowest levels since this ETF launched 25 years ago. We continue to recommend an underweight sector positioning.
