The cloud that appeared to hang over the health care sector for some time has cleared as the sector is now outperforming the broader market indices. Looking at the Health Care SPDR (ETF) (NYSEARCA:XLV), the group is trading 12% higher for the year. Focusing on the company level for the health care sector, the top 10 performers are averaging 41% year-to-date, while the bottom 10 are averaging a 8.9% return.
The disparity between the top- and bottom-performers tells us that this is a stock pickers dream of a sector. Today’s three big stock charts takes a look at AmerisourceBergen Corp. (NYSE:ABC), Anthem Inc (NYSE:ANTM) and Cerner Corporation (NASDAQ:CERN) as leadership stocks that are ready to move even higher.
AmerisourceBergen Corp. (ABC)
Pharmaceutical sourcing company AmerisourceBergen has lit it up to the tune of 20% year-to-date. This matches the stock’s 12-month return, indicating that it has been a comeback kid within the sector.
The charts for ABC is bullish from a short-term trend perspective as shares are breaking above $92. This price stood as resistance in February and took the stock all the way back down to $80 in April.
A good earnings report sparked a short-term rally that now has ABC stock breaking through the $92-level chart resistance with a higher target.
The last two days have seen AmerisourceBergen stock teeter on breaking through the top Bollinger Band, a move that will add to the positive volatility the shares have experienced. Look for ABC shares to target $100 on that move.
Anthem Inc (ANTM)
Anthem is one of the health benefits companies providing leadership in the health care sector with 31% year-to-date gains.
ANTM stock is in the midst of a volatility rally as shares broke through chart resistance at $185 on Thursday. The move also took the stock through the top Bollinger Band for the first time since late April.
The Bollinger Band break in April resulted in a 10% rally that stalled at $185, thus creating the chart resistance for Anthem at that level.
We expect to see the technical traders move into the shares quickly as ANTM stock breaks higher with a target of $200.
Cerner Corporation (CERN)
It is no surprise that a technology company in the health care sector is taking a leadership role in this rally. Cerner shares have racked-up 40% gains over the last 12 months and are setting-up to break above a key chart level.
The $67.50 price point caused CERN stock to tumble as “sell the news” traders took profits after the August 2016 earnings results, which were positive. From that point, Cerner stock rode a “slope of hope” decline into its January lows at $47.50.
Now, with positive fundamentals and a strong technical backdrop, CERN stock is set to take out those August 2016 highs. The break above this long-term chart resistance level will attract the attention of the long-term traders and likely increase buying volume.
A bonus on CERN shares is that the short interest is in the process of receding, indicating that the stock is being driven by a short covering rally. This will add additional fuel to the current rally that should target $76.
As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.