Medic! Medic! Is there a doctor in the house? 'Doctor, Doctor, gimme the news', can you save Mister Healthcare lying on the gurney choking for breath? No, my son, there is nothing you can do, he will receive the neggie d spankdown for many weeks to come. Nooooo! Anything but the neggie d smackdown!
The XLV healthcare ETF is sick, the puns come effortlessly. It is a double-top, or M-top, like the XLF financials ETF is displaying on its daily and weekly charts. Little Tiny Bubbles appearing like when Don sings.
As price prints a matching high, all the chart indicators are obviously negatively diverged across the board (sloping down while price is moving up), so a spankdown is needed in the weekly time frame. You can see that even if price popped higher, it would be extremely difficult for the indicators to come up to new highs, so the neggie d will remain in play forecasting the top and pending, or now, ongoing, smackdown.
The RSI and stochastics were overbot agreeable to a pullback which occurred last week. Price is extended above the moving average ribbon so a mean reversion lower is needed. The red rising wedge pattern is bearish and things will get ugly fast as price drops below the bottom rail.
Price ran up the upper standard deviation band for the last couple months so a move to the middle band, that is also the 20-wk MA, at 149.06, and rising, would be in order, and the door to the lower band at 140 and rising is also open. Do not rule out another touch of the top band at 158 if there is happy talk as the new week of trading begins.
The Aroon green line says the healthcare bulls are all convinced that the XLV will go up forever on the weekly basis. The Aroon red line says the healthcare bears are also convinced that XLV will go up forever. It is rampant complacency and fearlessness as the party rages on with euphoric joy (top behavior).
The dark blue circles show distribution taking place. The smart money is sloughing off healthcare shares to Joe Sixpack, Carmelita Winedrinker, and Carlos Bagholder, known as the dumb money. The investment houses are clearly dumping XLV since late June gittin' outta Dodge while the gittin' is good. Do you see and hear all the analysts and talking heads parading across television and computer screens espousing the virtues of healthcare stocks? One after another are telling you to buy, buy, buy! Pump and dump, baby. If you buy, you be the sucka.
The light blue lines show a two-leg bull flag pattern starting at the bottom in October 2023. The first leg is 122 to 147 a difference of 25 points. The sideways to sideways lower consolidation occurs, although it is not the prettiest consolidation pattern, and then the second leg starts at 138. Thus, mathematicians say thus a lot, thus, 138+25 is 163. Price popped to 160 which may be close enough for government work to satisfy the pattern. If price moves above the 158 top band, it may try to make it to 160-162, but by the looks of the neggie d, this is highly unlikely. The corrupt casino may offer happy talk about some healthcare names to try and give XLV a boost.
148 may offer a downside target since price congestion begins there and may offer support. Also, the lower band and 50-wk MA are rising sharply, and as price drops for a few weeks, they may also converge around 147-148. You can simply watch the charts develop and they will tell you.
Keystone is not playing any healthcare names long or short currently, or derivatives, but will keep an eye on XLV, and/or individual names, to short them. Let's take a look at the daily chart; price is getting smacked downward by the neggie d and double-top. That weakness should continue. 5 days ago it would have been easy to call the top on the daily chart and play it short. The 2-hour chart is stumbling sideways. The approach going forward would be to short all rallies in XLV. If you have profits in healthcare, take them, move on and have fun, before you become sick lying on the gurney. 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.
Note Added Tuesday Evening, 9/24/24, at 8:04 PM EST: XLV is at 154.09 printing a low at 153.36 today.
Note Added Hump Day, 9/25/24, at 10:30 AM EST: XLV drops to 153.01. The 50-day MA is 152.18.
Note Added Saturday, 9/28/24: XLV finishes the week at 153.02. The 50-day MA is 152.36.
Note Added Saturday, 10/5/24: XLV finishes the week at 151.64. Nurse Ratchett! We may have a Basket Case here. Humana soils the sheets this week. HUM crashes -25%. That's inhumane.
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