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Healthcare Sector Bullish in All Three Timeframes

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In my Thursday article in the DecisionPoint blog, I discussed the new PMO BUY signals on the DP Scoreboards, finishing off the article with a chart of the Healthcare Sector ETF (XLV) after I received a new Intermediate-Term Trend Model BUY signal (a positive 20/50-EMA crossover on the daily chart). I decided to research further because today's daily chart for XLV looked particularly bullish. I thus wasn't completely surprised to see healthy (pun not intended) weekly and monthly charts. This reminds me very much of the set-ups I've written about in past articles on the Natural Gas and Real Estate sectors. Those turned out to be very accurate.



On Thursday, I pointed out that the bullish ascending triangle had executed. On Friday, we saw a rally pop of over 2%, which set a new all-time closing high for XLV. If you do the measurement of the back of the triangle and add it to the breakout point, we get an upside target around $100. The PMO is showing a bullish confirmation and the OBV has risen above its previous top.

The PMO on the weekly chart is about to trigger a new PMO BUY signal.

On the monthly chart, we can see a strong rising trend channel and a PMO BUY signal. The PMO has surpassed its previous top and is not at all overbought. We also have a bullish confirmation, with PMO bottoms rising with price bottoms.

To punctuate this article, I decided to throw in the seasonality chart for XLV (Tom Bowley is rubbing off on me!) and you can see that XLV is still in a bullish seasonality period that should continue through the end of December.

Conclusion: Despite bear market sign posts on the large-cap indexes, the Healthcare sector remains strong. If I were trading right now, this is the sector I would scan for investment opportunities.


Helpful DecisionPoint Links:

Erin's PMO Scan

DecisionPoint Shared ChartList and DecisionPoint Chart Gallery

Trend Models

Price Momentum Oscillator (PMO)

On Balance Volume

Swenlin Trading Oscillators (STO-B and STO-V)

ITBM and ITVM

SCTR Ranking


 

Technical Analysis is a windsock, not a crystal ball.

Happy Charting!
- Erin


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Erin Swenlin
About the author: helped create and manage the DecisionPoint.com website alongside her father, Carl Swenlin. Together, Erin and Carl launched the DecisionPoint daily blog in 2009. She hosts the MarketWatchers LIVE web show at StockCharts.com, and is also a Member of the CMT Association. Learn More
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