Bullish on Health Care

The surprise this year from a sector perspective has been the strong relative performance of the health care sector. The conventional wisdom was that the Affordable Care Act would create chaos in the sector and crush earnings as new regulations and a significant change to the health care business model was put into effect by the Obama administration. Surprisingly, once the rules became known and winners and losers were sorted out, the sector gained some strong bullish traction. The health care sector has broken out to new all-time highs and the bullish price structure suggests the upside for the group is open.

The S&P Health Care Index broke out to new all-time highs earlier this year. The sector is steadily gaining relative strength compared to the S&P 500. The group even held up well during the recent corrective pullback in the broader market. The cyclical price structure for the index remains bullish and viable. The index formed a bullish head & shoulders consolidation from 2008 through 2011 and broke the neckline last year. The index has been steadily grinding its way towards the head & shoulders pattern's measured move target of $46 for the Health Care Select Sector SPDR (XLV). The measured move target is a minimal expectation for the pattern resolution, and we could see the group easily trend higher....209 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

Read the full story and get access to the Real Money Pro trading floor.

There’s no substitute for a trading floor to get great ideas, so Jim Cramer created a better one at Real Money and blogs there exclusively. We then added legendary hedge fund manager, Doug Kass, with his exclusive Daily Diary and best investing ideas. Staffed with more than 4 dozen investing pros, money managers, journalists and analysts, Real Money Pro gives you a flood of opinions, analysis and actionable trading advice found nowhere else, and allows you to interact directly with each expert.

Already a Subscriber? Please login.

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.