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The Positive Performance of the Healthcare Sector

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Nov. 21 2016, Published 10:50 a.m. ET

Healthcare sector, a 3.0% rise

The healthcare sector (VHT) showed positive performance in the recent rally after the US presidential election. We saw in the previous parts of this series that most of the cyclical sectors showed positive performances after the Donald Trump won the election.

The Health Care Select Sector SPDR ETF (XLV), which tracks the performance of the healthcare sector, rose 3.0% from November 9–17, 2016.

Major holdings of XLV such as Johnson & Johnson (JNJ), Pfizer (PFE), Amgen (AMGN), and Allergan (AGN) returned -0.42%, 5.7%, 6.4%, and 2.1%, respectively, from November 9–17, 2016.

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In the presidential campaign, Democratic presidential candidate Hillary Clinton supported the Patient Protection and Affordable Care Act, also known as the Affordable Care Act or Obamacare. Trump said he wanted to replace it. The possible repeal of Obamacare might be an opportunity for healthcare stocks.

Performance of the healthcare sector

On a year-to-date basis, the Health Care Select Sector SPDR ETF (XLV) returned -0.40%, as of November 19, 2016. XLV is currently trading ~1.1% above its 20-day moving average and ~3.5% below its 100-day moving average.

On April 15, 2016, its 20-day moving average crossed its 100-day moving average in an upward direction. The stock has shown huge upward movement since that day.

In the next part of this series, let’s look at the performance of the dollar index.

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