In our last weekend update which is typically full of market insights for medium term oriented stock investors but also shorter term trades we identified a few sectors that are bullish… or are about to become bullish. One sector that caught our attention in the health sector.
The XLV ETF sector chart is really gorgeous. It represents the health sector, and we like it a lot because of several reasons:
- A 3 month bullish reversal is now complete. The market has to confirm a move higher, we cannot exclude some continued consolidation… but this setup looks good for a trend higher starting in the short term.
- A longer consolidation as this sector didn’t trend since November. Long consolidations are great.
- Biotech, a crucial component in health, is really weak. This implies that the other components in XLV are really solid.
In the medical devices subsector we see a lot of strength, and it illustrates how breaking down XLV ETF in subcomponents is the path to find future leaders in individual stocks.
