XLV declined ~1% last week, still consolidating gains above its 200-DMA ($131.12). The next level of resistance is $135.81. Its RS line declined over the last week, but is still holding previous lows, warranting an equal/overweight sector positioning. Action was fairly broad (see heat map), with distributors (driven by MCK) leading last week. Overall, Biotech and Medical Devices are acting best, while Bio-Production remains out of favor.
Symbol: PKI
Global Laggards
Highlighted Charts
U.S.: Barrick Gold Corporation (GOLD), Emerson Electric (EMR), Ford Motor (F), Mohawk Industries (MHK), Vista Outdoor (VSTO), Archer Daniels Midland (ADM), A P A Corp (APA), Constellation Energy Corporation (CEG), Conocophilips (COP), Magnolia O&G Corp (MGY), Matador Resources (MTDR), Pinnacle Financial (PNFP), Brookfield Corp (BN), First Citizens Bancshares (FCNCA), ICICI Bank Adr (IBN), Perkinelmer (PKI), Staar Surgical (STAA), C V S Health Corp (CVS), Photronics (PLAB), Ubiquiti (UI), Charter Communications (CHTR), Cognex Corp (CGNX), Endava (DAVA), Dropbox (DBX), Epam Systems (EPAM), Alphabet Cl A (GOOGL), Matson (MATX), CSX Corp (CSX).
Developed: Asahi Kasei (AC@N.JP; 3407 JP), Hirose Electric (RT@N.JP; 6806 JP), Wilmar International (EZYH.SG; WIL SP), ASX (ASX.AU; ASX AU), Sugi Holdings (SUGP.JP; 7649 JP), Seiko Epson (SEEP.JP; 6724 JP), Rightmove (RMV.GB; RMV LN).
Emerging: Charoen Pokphand Foods (CPFT.TH; CPF TB), Kangwon Land (KWL.KR; 035250 KS), Bajaj Finance (BJF.IN; BAF IN), Devyani International (DI8.IN; DEVYANI IN), Rumo On (P3M.BR, RAIL3 BZ).
Health Care Conference— Select Ideas
Key points from this report:
- Ideas are showing positive technical trends, holding above key price and/or moving average support.
- Ideas also have either positive fundamental ratings and rankings and/or accelerating annual EPS growth.
- Included are 30 annotated charts.
O’Neil Health Care Weekly
XLV gapped into another new all-time high last week after trading relatively flat for two weeks. Its RS line is still flat versus
a strong S&P 500 despite a multitude of big cap quality secular growth ideas also trading at new highs.
The majority of ideas are extended from ideal entry points, therefore we recommend a patient approach to adding risk.
Focus on high relative strength ideas as they form the right side of bases ideally in heavy volume, while also looking to
increase risk in leading ideas that constructively pull back to logical support.
O’Neil Health Care Weekly
XLV gained 1.6% last week moving back to all-time highs. Though the sector is flat versus the S&P 500 over the last month, action has been constructive. Leading groups (Hospitals, Managed Care, Tools, CRO’s) held near-term levels of support, while growth-oriented groups (Med Devices, Genomics) continue to improve. Drugs (Pharma, Biotech) are being led by a select few stocks, while the vast majority are still lagging within the sector.
O’Neil Health Care Weekly
XLV’s RS line (vs S&P 500) moved back up last week as majority of the large-cap Health Care ideas continued
to rise. Multiple ideas cleared above their key moving averages and are now forming the right sides of their
respective bases. Earnings session has almost come to an end. On an average, S&P 500 Health Care ideas beat consensus
revenue and EPS by 3% and 13%, respectively in Q1.
US Focus
The U.S. market is in a Rally Attempt. We will upgrade the market to Confirmed Uptrend should either S&P 500 close above 3,950, or the Nasdaq stage a follow-through day. Support on the S&P 500 is again the rising 10- and 21-DMA (3,873). The Nasdaq faces resistance at its 50-DMA (13,368), with support at ~13,000 before the rising 100-DMA (~12,700). Though the Nasdaq is still trading 6% off highs, multiple other indices are trading at all-time highs including the Dow and the Russell 2000.
Won Global View
The U.S. market is in a Downtrend. The S&P 500 added four distribution days over five sessions, resulting in its first break of the 50-
DMA since November. Despite a snapback rally on Friday, the index now faces multiple layers of resistance including its rolling 21-DMA
(3,855). Near-term support is now ~3,700, which may coincide with the rising 100-DMA. The support range below the 100-DMA is 3,500–
3,600, the top of the prior Q4 consolidation, which may coincide with the rising 200-DMA. The Nasdaq also broke its 50-DMA last week in
rising distribution. This index added back-to-back distribution days on Wednesday and Thursday, resulting in a 10% decline off highs to
near-term support at its 100-DMA (~12,600). Should this level break, the next level is ~12,000, which may coincide with the rising 200-
DMA.
US Focus
The U.S. market remains is in an Uptrend Under Pressure. The S&P 500 and Nasdaq pulled back to their respective 50-DMA in volatile action this week. Support below this major moving average is ~3,700 on the S&P 500, which is near the January 29th low and the rising 100-DMA. Support below the 50-DMA for the Nasdaq is between 12,900 to 13,000, an area that held twice in January. The distribution day count stands at five each, with two expiring on the S&P 500 and one on the Nasdaq next week.
US Focus
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq pulled back slightly this week but held above support at the 10-DMA (S&P500 :3,905) and 21-DMA (Nasdaq:13,720) , respectively. The distribution day stands at four and three days, with one day expiring on S&P 500 next week.
