Always consider hidden risks
The Healthcare Sector (XLV ETF) : A Healthy Technical Test?
April 18 2016 ​( From TradingView,  )

​​​​The Situation

​The Healthcare Sector ETF XLV (Health Care Select Sector SPDR Fund), since making that all time high at 77.40 on July 20 2015 is within a lower highs and lower lows macro technical pattern. (See first chart below).

​​Also, the XLV ETF is within a falling wedge technical pattern that need to be followed carefully at those levels:
​in fact, we are testing the major resistance trendline from that falling wedge that started back since August 6 2015, the 200 DMA (Day Moving Average) and also the 50% Fibonacci retracement zone at 70.04 on that ETF.
A wall of resistances indeed... (See chart below - Thick red trendline - Ellipse)​

But what puzzle me the most is that, as we are testing all those resistances levels on the XLY ETF, trading volume is weakening, not a good technical sign indeed. ​​​​(See Chart Below - Bottom Right - Blue Area)

The strong battle raging will be a tough one for Bulls as already the bullish percent index from Stockcharts is over 75, well into the greed sentiment zone...

Also take note that we are unable to stay above the 200 DMA price wise on that​​ ETF since August 21 2015.


​ ​

​Healthcare Sector ETF XLV
over SP500 Index - SPY ETF (Daily Candles​)
​20 DMA ( Yellow Line )​
50 DMA ( Red Line )​​
200 DMA ( Green Line )​ ​

Healthcare Sector ETF XLV
Daily Candles​
​20 DMA ( Yellow Line )​
50 DMA ( Red Line )​​
200 DMA ( Green Line )​ ​
Chart source:
Chart source:
On a relative basis

​​​​The Healthcare Sector ETF (XLV) started to underperform tremendously compare to the mighty SP500 (SPY ETF) on a macro basis since August 6 2015. That ratio (Healthcare Sector ETF XLVover SPY ETF) is now within a downtrend channel technical pattern.
​(See chart below - daily channel).

​​​​But the most interesting technical factor is that ​​the Healthcare Sector ETF (XLV) on a relative basis (SPY ETF) is into a dead cat bounce phase only, unable yet to stay abov the 50 DMA and still making lower highs and lower lows technical pattern. ​​​​The Healthcare Sector is definitively weaker than the S&P Small-Cap ETF IJR  ... ​​​​​
(See chart below - Downtrend channel).
Bottom Line

As the XLV ETF is having an healthy technical test of multiple resistances trendlines, it is doing so with a lower volume environment;​​ maybe we have to consider that finally, we are into an unhealthy technical pattern and be cautious for the XLV ETF forward performance...