Don't Ignore This Chart!

Medical Supplies Breaks Out Of Bullish Wedge

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Healthcare stocks (XLV) have been underperforming the benchmark S&P 500 for the past 4-5 months, but they're beginning to show some life as the XLV has been the best performing sector ETF over the last week.  Recently, I noticed pharmaceuticals testing a major price support level and they've begun to bounce, rising 4.52% over the past week.  Next up appears to be the Dow Jones U.S. Medical Supplies Index ($DJUSMS).  Their one week gain has been a more modest 2.35%, but check out the bullish technical developments on the chart:

Today's close has cleared wedge resistance near 720, but keep in mind these are weekly candles and we still have one more trading day to finish out this week.  It appears to me that the DJUSMS is heading back to 750 to test the high established back in July and that's another 4% or so higher.

Happy trading!

Tom

Tom Bowley
About the author: is the Chief Market Strategist at EarningsBeats.com, where he provides stock market education, guidance, and trading strategies using a unique combination of technical, fundamental, and historical analysis. Tom provides EarningsBeats.com members with four portfolios (Model, Aggressive, Income, and Value), all designed to beat the benchmark S&P 500, and a revolving Watch List of hundreds of companies reporting strong quarterly earnings (must beat both revenue and EPS estimates) and exhibiting technical strength as well. These companies comprise EarningsBeats' annotated Strong Earnings ChartList (SECL), from which Tom trades exclusively. Tom writes a Daily Market Report (DMR) for members to include an executive summary, market outlook, sector/industry watch, and trading ideas. Learn More
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