The Health Care Sector Is Breaking Out

The health care sector as tracked by the Health Care Select Sector SPDR ETF broke out last week, and it is pointing to more gains to come.

The health care sector as tracked by the Health Care Select Sector SPDR ETF (NYSE: XLV) broke out last week, and it is pointing to more gains to come.

Since the election, the health care exchange-traded fund has soared over 20%, outperforming the S&P 500 Index by 5 percentage points.

This outperformance will have its ups and downs, but after the breakout last week, health care has more room to run.

Take a look:

The health care sector as tracked by the Health Care Select Sector SPDR ETF broke out last week, and it is pointing to more gains to come.

The red line represents the previous all-time high for the ETF set in 2015. Prices broke above that level in June, and then hit resistance around $81.

728X170PRL-IOT_Article_3AdsIn1_article
728x170_Expert-dow-surges-1000_article
728x170_CanYouIdentifyRock_article
728x170_Cybersec_anything-unusual-article
728x170_small-stake-net98470_article
728x170_2-in-1-trillion-howto-smallstake_updated-article

That’s where prices created the more recent highs, before drifting back down to test the previous all-time-high price level, before then surging higher.

Ultimately, prices broke out above the $81 level.

It was an extremely healthy uptrend to see prices retrace back to test the all-time high after breaking out above that price range, and the latest breakout is confirmation the health care sector is in a renewed uptrend.

While I don’t expect prices to keep surging this sharply, the sector will continue to trend upward from here.

Regards,

Chad Shoop, CMT
Editor, Automatic Profits Alert