The healthcare sector is getting a safe haven boost. This one stock is headed for a long-term breakout
(See the video above for Jay’s complete chart breakdown.) The healthcare sector has been one of the hottest areas over the last three months. Overall, it is higher by 15% year-to-date and is looked at as a safer haven in turbulent times. When looking under the hood at some of its biggest components, many of the charts looked great from a risk/reward perspective, namely, CVS Health Corp . When I look at this chart, I see a great risk/reward opportunity and a potential long term buy and hold if the current pattern continues higher. Let’s break it down… On the one-year daily chart above we see a clear line in the sand between $82 to $86. Use this as your guide. Above it – stay long, below the level – get out and re-evaluate the trade. Key points: Support held and near-term downtrend broken Momentum indicators turning higher, MACD buy signal Targets of $99 takes price to the gap from its last earnings report Further momentum could fill the gap to $105 from $99 and challenge 52-week highs When we back it out to a five-year weekly chart, we confirm our short-term thesis and see a potential for a longer-term breakout with targets to $150. Key points: New long-term uptrend forming and holding Key level to manage risk of $82 to $86 same on both time frames Long term Stochastic triggering buy signal, other momentum indicators neutral Targets of $110 and a retest of resistance probable Breakout above $110 gives us upside of $150 over 6 to 9 months. -Jay Woods with Chase Games Jay Woods is the Chief Market Strategist at Freedom Capital Markets. DISCLOSURES : Woods owns JPMorgan personally and with family. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
