Health care stocks rallied on Tuesday after Republican Senator Alexander says he and Democrat counterpart Patty Murray have come to terms on a deal for legislation to resume bailout payments to insurers. The Health Care Select Sector SPDR ETF (XLV) has risen more than 20 percent YTD, outperformed the S&P by more than 6 percent. Now the question is whether the rally has more legs? In fact, according to our “U.S. Market Trading Map”, Tuesday’s breakout indicated a bullish trend reversal. Below is an update look at a trade in the XLV.
The graphic below is from our “U.S. Market Trading Map”, show the near-term technical bias and trading ranges. As shown, the underlying is in a short-term bullish trend when the price bars are painted in green. The underlying is in a short-term bearish trend when the price bars are painted in red.
Chart 1.1 – Health Care Select Sector SPDR ETF (daily)
Our “U.S. Market Trading Map” painted XLV bar in green (buy). Over the past few days, XLV has been trending lower in a short-term corrective mode as it worked off overbought conditions. The correction found support at the 20-day moving average. Tuesday’s breakout pushed the ETF above the September’s falling trend line, signify…Click here to read more.
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