From the desk of Tom Bruni @BruniCharting
We’ve been extremely vocal about the Medical Devices space on the blog, and rightfully so, with the sector continuing its long-term trend of out-performance throughout 2018. The index has 57 components, but because the top 10 stocks make up roughly 60% of the index, opportunities in the smaller components tend to be overlooked by many market participants. In this post I want to look at all of its components and highlight names where our risk is well-defined and the reward/risk is still skewed in our favor.
Let’s start off with the sector ETF $IHI on an absolute basis for context. Prices are just off all-time highs after successfully retesting their breakout area near 203.50. As long as prices are above that level, short and intermediate-term momentum remains intact and our next upside objective is up near 248-249.50.
Click on chart to enlarge view.
On a relative basis, the sector continues to digest its strong year-to-date gains and work off a bearish momentum divergence by consolidating above our previous price objective at 0.734. As long as this ratio remains above that level, an upside resolution and continuation of this long-term uptrend is the most likely outcome.
An individual name in the sector breaking out is Masimo Corp. It’s been consolidating for the last 18-months and this push to new all-time highs signals the resumption of its long-term uptrend. As long as prices are above 104.80, we want to be long with an upside target of 119.50.
Conmed Corp. is another name making fresh all-time highs after consolidating below our price target 76.10 for the last 6 weeks. As long as prices are above that level, we want to be long and taking profits at 101.25.
Medtronic PLC is breaking out of a 2-year base to new all-time highs. If prices are above 88.50 we want to be long and taking profits at 101.50.
Premium Members can log in below to access the full list of Medical Device stocks we want to be buying. Please login below or start your risk-free 30 day trial today.
Lost Password?