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:
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:
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.
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:
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.
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