The healthcare sector is beginning to show signs of life, pun intended. The XLV which was the worst performing group of 2016 could be in for a rebound in 2017. Looking back over the last few years one can see that the softest acting groups one year could become big winners the next. For example in 2015 energy was the worst performer with the XLE down 21.5% and in 2016 it was a top performer advancing 19.4%. In 2013, utilities were the dogs losing 13% and in 2014 they were the best behaved higher by 28.6%. In 2011 it was the financials who stunk up the joint and were the worst performers down 17.2% and in 2012 they were the leading sector advancing 28.5%. Of course historical data means little and one should follow PRICE action alone. Below is the chart of a smaller name in healthcare that I was WRONG about and exactly how it was portrayed in our Friday 12/16 Game Plan, but the second chart shows it deserves a second look at a potential long.
Stocks that can be bought after first touches of 50 day SMAs after firm breakouts are CORT. CORT is a healthcare play higher by 71% YTD and 79% over last one year period. Earnings have been mostly higher with gains of 8.5, 5.8 and 11.3% on 11/2, 8/3 and 1/29 and a drop of 1.7% on 5/4. The stock rose 37% the two weeks ending 11/4-11 and the next 3 weeks gave back half of that juicy gain dropping 18%. CORT reversed from 13 year highs with bearish reversal at precise round 10 number on 11/14. It fell until a bullish hammer off exact 50 day support on 12/2. That session also retested a 16 month long cup base trigger of 7.77 that began the week ending 6/26/15. Enter on pullback at 8.25.