It's also important to note where this momentum reading is occurring on the price chart.
This week's rip broke XLV out of a 6-month base with authority, reclaiming its all-time high VWAP and the 38% retracement in the process.
That all just happened in the past few sessions!
Now consider the fact that healthcare hasn't really participated for the past year. It's been one of the worst places to be, in a steady downtrend since last summer.
Investors are basically ignoring these stocks at this point… just as the trend is reversing course to the upside.
And that kind of sentiment can really magnify moves, especially when fear is replaced by relief, which is what seems to have taken place after the announcement at the White House Tuesday.
The agreement between Pfizer and the US government looks to have been a clearing event for the regulatory uncertainty hanging over the sector.
So let's recap… just as sentiment appears completely washed out, we get a bullish initiation reading as healthcare stocks bottom and reverse higher… And as it's happening, big pharma is doing deals with the government.
It almost sounds too good to be true, right?
Remember, big moves start with big moves. That's what's going on here.
So it's time to dance with healthcare for as long as the music is playing.
They finally made it to the party. Good for them.
Have a great weekend.
Steve
