Healthcare Debate – Higher or Lower

• Posted by Greg Harmon
• on October 19th, 2011

Healthcare, a defensive sector has been a good place to store wealth the last few months. And some stocks have been better stores than others. In fact some made large runs high and are at all time highs. Let’s look at a few to see what they think about the future prospects of the broad market.

Mako Surgical, $MAKO

Mako Surgical, $MAKO, made all time highs on Friday last week and is now consolidating near 39 from the last move higher. The Relative Strength Index (RSI) is heading lower but still in bullish territory while the Moving Average Convergence Divergence (MACD) indicator is fading towards zero. Despite that weakness the Simple Moving Averages (SMA) are all sloping up. A mixed bag here. Look for further downside under 39 and a move above 41 as a decision to run higher.

Seattle Genetics, $SGEN

Seattle Genetics, $SGEN, also made an all time high recently, but has been pulling back since then. The RSI is trending lower and the MACD has crossed negative and growing more so. These support more downside. And with the SMA’s over 10% below the price that is not unexpected. There may be a bottoming occurring and a turn higher in the bull flag, but that is far from certain today. Another mixed bag. Losing 20 or breaking above 21.20 will be the statement that determines the next move.

STAAR Surgical, $STAA

STAAR Surgical is building a bull flag after a second run higher above resistance. The RSI is holding higher and the MACD is positive, and holding steady. The SMA’s are all pointing higher and the Bollinger bands have expanded to allow for the run to all time highs. The only weakness in this name are the couple of ‘Topping Tails’ in the flag. Do not be left holding it on a move below 8.85.

Thoratec Laboratories, $THOR

Thoratec Laboratories, $THOR, broke out above its resistance at 35 and ran higher to the July highs a t37, where it is consolidating in a bull flag. The RSI is trending higher and the MACD is positive, supporting more upside. The ‘Topping Tails’ in the flag are the only caution in this name as well. Don’t be left holding it on a move below 36.

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