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Moving Average Analysis of the Healthcare Sector

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Healthcare sector

The healthcare sector was the least impacted component sector of the SPDR S&P 500 ETF (SPY). The Health Care Select Sector SPDR ETF (XLV) fell to 1.9% on December 18.

The above table shows the returns of Mylan (MYL), Cigna (CI), Quest Diagnostics (DGX), Mckesson (MCK), and Varian Medical Systems (VAR) along with their respective moving average values. These companies are involved in drug manufacturing, healthcare services, and healthcare distribution. The stocks rose by 0.4%, 0.7%, 0.9%, 1.8%, and 0.6%, respectively, on December 18.

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In-depth analysis

  • Although biotech and healthcare stocks generally have their beta values more than one, the above-mentioned stocks have a beta less than one. The beta value signifies the volatility of the stock. It shows its sensitivity towards the broad market movement. The more the beta value is above one, greater the stock’s sensitivity to the market factors.
  • Since the above-stated stocks have a beta value less than one, they were impacted less and didn’t follow the market direction. This yielded some positive returns.
  • Out of the given five stocks, Mylan, Cigna, and Quest Diagnostics settled at prices that were above their respective 100-day, 50-day, and 20-day moving averages. This implies an upward trend in the stock price movement in the near term.
  • Cigna yielded the highest trailing one-year return. It rose by 37.7% as of December 18.
  • Compared to their respective analyst stock prices targets, the stocks’ average growth potential is 13%. It’s 18% for both Cigna and Mckesson (MCK).
  • The average value of the RSI (Relative Strength Index) of these stocks is 58. This implies that these stocks aren’t overbought or undervalued.
  • These stocks have nine “buy,” eight “hold,” and one “sell” recommendation.

Next, we’ll look at SPY’s key stocks on December 18.

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