It’s been a hard road for this more defensive sector since the casino bottomed out at the Christmas Eve Massacre and its patrons gradually regained their backbones in order to accept risk. The final indignity was the ‘Socialization of Medicare’ hysteria that swept the market and tanked the Healthcare sector in April (where I took still-held long positions in Medical Devices via IHI). Since then XLV/SPY has been ‘V’ bouncing.
But what of the nominal sector (XLV)? Well, it is in the nose of a Symmetrical Triangle and also also within its big daddy. The little guy would be broken if XLV gets through the converged moving averages. Next up would be the jobs of breaking the noted lateral resistance shelf, the daddy triangle and finally the 2019 highs to send it truly bullish. For now, it’s constructive and acting as the relatively defensive sector that it should be, along with its fellows in REITs, Utes, Staples, etc.
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Red Cross courtesy of Icons Land.