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Follow up on the health sector and Medtronic

November 24, 2014

One month ago, I showed the potential for relative strength for the S&P Health Care Equipment & Supplies Index. Here is an update.

S&P Health Care Equipment & Supplies Index versus S&P Media Index

HEALTH EQPT V MEDIA 241114

  • This chart was shown after the first move above the base at A
  • The moving average crossover occurred in early November
  • A bearish divergence was formed on the 14 day RSI and another one could form on a new high
  • Underperformance by the media sector has contributed to the progress as much as health care outperformance
  • Due to the divergence, there is likely to be a period of consolidation towards the rising moving averages but the long term trend will remain up

I showed Medtronic as an example from the sector

Medtronic (MDT) v S&P 500 Index

MDT V SPX 241114

MDT has continued higher against the S&P 500 Index

I showed two Bollinger Band breakout set ups using MDT.

MDT v GameStop Corp (GME)

MDT V GME

  • There has been a decisive break higher following a 13% fall for GME on Friday
  • This should continue higher in the medium term but a meaningful stop loss (below the moving average) is a long way away now
  • The sharp move higher in January 2014 was the end of the move for almost a whole year

I will pass up on this trade now

Update on Kellogg (K) v Disney (DIS)

K V DIS

  • This trade made a positive start last week and shows a 2.5% gain
  • The stop loss is moved to the break even level of 0.720496

 

 

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