Health Care Stocks Have Rallied Nicely In North America But Look Tired

Five weeks ago 64% of the MSCI North America Health Care stocks were trading above their 200-day moving average.This was the fewest number of stocks trading above their 200-day moving average since December 28th, 2012. This slight sell off did not last long as Health Care stocks have now moved back into basically overbought territory at 78% as of last friday. Using this simple measure, we haven't seen a truly oversold signal in Health Care stocks since November 2011. 

% of Issues Above 200-Day Moving Average




This latest move has pushed stocks from about 2% over their 200-day moving average to almost 6% above. We have also seen the percentage of stocks outperforming the MSCI World Index move from 44% (lowest level since April 25th, 2012) to 56%.

Price Relative to 200-Day Moving Average




Somewhat surprising given the move, the 200-day Net Advances has actually fallen over the past 5 weeks and the Net New 200-Day Highs haven't really expanded. This may be a sign that the this was more of a bounce (at least for the moment) rather than a resumption of the multi-year advance.