This week saw Healthcare stocks do a 180 degree turn in the way they feel and the way they are trading. The stocks which were on a tear are not trading like a normal corrective reaction; the bid in the group feels like it is gone.
The turn came the day after the first Presidential debate which was October 03, 2012.
The BBH, PPH and the XLV all peaked on October 4th & 5th. Since then, the bids have vanished.
The group as a whole made new 52 week highs after the Supreme Court’s ruling upholding Obamacare.
Even though the group is in a primary uptrend, and supported by fantastic demographics, we know that the market hates uncertainty and many of the group’s underlying technicals are negatively divergent.
We sold our Bristol-Myers (BMY) long and we are holding our Amgen (AMGN) short for now.
The charts below illustrate the correlation we see.
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