XLV Healthcare Daily Chart Upward-Sloping Channel Rising Wedge Overbot Negative Divergence Price Extended Above 200 MA

In normal markets over the last decades, when the business cycle runs its course and recession is on tap, traders seek the safety of sectors such as healthcare since these stocks tend to get hit less hard than the broader market. After all, when you are sick, or son Harry falls from the tree house and breaks his arm, or daughter Tina loses balance cutting her head on the coffee table, you have to see the doctor, healthcare is a necessity in good times or bad times.  Plus, as economic times worsen, and folks lose jobs, illness and health needs rise.  However, these are not your Grandfather's markets. The Fed and other central bankers have distorted all price and asset relationships. A market rally should continue higher with tech and small caps leading, instead, the central banker easy money is pumping markets higher on the backs of dividend stocks, healthcare, consumer staples, utilities, and other perceived safe havens. The healthcare sector is up 135% in four years matching the obscene move in consumer staples. Perhaps Obamacare provides upside as well.  XLV has risen an astounding 22% in only the last 14 weeks, moving up at a phenomenal 1.5% per week, into bubble territory, even surpassing the bubble behavior in consumer staples and utilities. Note the elevated price above the 200-day MA (green dots) indicating an over extended market.

The red rising wedge, overbot conditions and negative divergence wants a pull back but short term momo (MACD line) will likely print some matching or higher highs as the central bankers keep forcing equities higher. Projection is a flatish move and roll over moving forward. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.