Market-Leading Rebound in 2024
After a modest loss in 2023, shares in the healthcare sector are enjoying a market-leading rebound so far in the new year. The early results look encouraging as this slice of the market has pulled ahead of the rest of the field year to date, based on a set of sector ETFs through yesterday’s close.
Health Care Select Sector ETF XLV has climbed 2.2% so far in January, outperforming the broad market (SPY) which has ticked down 0.6% in 2024’s opening run. Healthcare is also outperforming all the other sectors, in some cases by wide margins.
US Equity Sectors ETF Performance
Outlook for 2024
Energy stocks are currently the worst performer among US sectors, with a year-to-date decline of 4.5%. However, several health stocks are exhibiting positive technical profiles and the return of the so-called golden cross: 50-day moving average rising above its 200-day counterpart.
Renaissance Macro’s Jeff DeGraaf advises that “several healthcare names are exhibiting golden crosses, and we continue to believe the prospects for the sector are attractive for 2024.”
XLV also looks attractive in the wake of its 50-day average again rising above its 200-day average.
Potential Bull Run
Investors in healthcare shares hope that XLV has finally broken out of its trading range on the upside this month. Despite this, skeptics note that this indicator has issued several false signals in recent years while the fund has remained in a trading range.
It seems that XLV has broken out of its trading range on the upside this month, indicating a potentially favorable trend signal for healthcare shares in 2024. The odds appear to be leaning a bit more in that direction so far this month.
