Trading Strategy – Health Care Select Sector SPDR ETF

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.

You see, our trend-following system is very unique as it attempts to pick turns before others see them. Timing is everything and if you’ve applied our system correctly, you should have made a killing in any markets.


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