Follow up on the health sector and Medtronic

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

• 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 has continued higher against the S&P 500 Index

I showed two Bollinger Band breakout set ups using MDT.

MDT v GameStop Corp (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)

• 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