New Highs in Health Care

On Friday, the S&P 500 index pushed ever closer to its February 19 peak, led by 39 members setting new 52-week highs. Nearly half of them, 17, came from Health Care, helping that sector to join the list of those that have fully recovered from their spring selloffs:

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A perennial leader in Health Care over the last 5 years has been Life Sciences Tools and Services. They started making new highs again in May, and have extended their gains over the last 2 months. Friday marked another new all-time high:

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Biotech stocks, on the other hand, have been meaningful laggards over the last 5 years. After a rally of more than 400% from 2010 to 2015, the industry has gone largely nowhere ever since.

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But Biotechnology is gaining traction. After failing to break out from the channel early in the year, the group rallied to new highs in April, and successfully back-tested the range three times in the following months. On Friday, they set another all-time high:

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Meanwhile, the Managed Care, Health Care Equipment, and Pharmaceutical industries are each less than 5% from their own highs.

The sector’s breadth is simply unparalleled. A quarter of its members set a new 52-week high on Friday, but even more impressive is that 44% are above their Q1, pre-coronavirus, highs. By comparison, less than a third of the constituents can say the same in either Information Technology, Communication Services, or Consumer Discretionary.

That makes Health Care, dare I say it, the healthiest sector.

Nothing in this post or on this site is intended as a recommendation or an offer to buy or sell securities. Posts on Means to a Trend are meant for informational and entertainment purposes only. I or my affiliates may hold positions in securities mentioned in posts. Please see my Disclosure page for more information.

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