ETF Trends
ETF Trends

The Health Care Select Sector SPDR (NYSEArca: XLV) and the Guggenheim China Small-Cap ETF (NYSEArca: HAO) have been leaders in their respective market niches this year.  With a year-to-date gain of 28.7%, XLV is the best performer among the nine sector SPDR ETFs.

HAO’s out-performance of large-cap China ETFs is almost staggering. Year-to-date, the iShares China Large-Cap ETF (NYSEArca: FXI) is off 4.6%, implying a glum year for China ETFs. HAO has managed to gain 6.3% despite a generally trying environment for emerging markets ETFs. [China Small-Cap ETF Keeps Shining]

A look at HAO and XLV’s charts show more gains could be on the way for the two ETFs. HAO “bounced higher from a double bottom pattern, with a slight “undercut” of the prior low on the weekly chart below. Last Friday, HAO cleared the highs of a three-week range on better than average volume, signaling the uptrend may be ready to resume after a nine-month long consolidation,” said Deron Wagner of Morpheus Trading Group.

Regarding XLV, Wagner said the ETF “is poised to attack the prior swing high, with a close above last week’s high. The recent pullback in $XLV was the shortest corrective wave over the past few months, coming in at less than 3.5% off the swing high. The pullbacks in August and June were about 5.5% and 8% respectively.”

XLV allocates 45.2% of its weight to pharmaceuticals names like Johnson & Johnson (NYSE: JNJ) and Pfizer (NYSE: PFE). Making XLV all the more alluring is the health care sector’s reputation for being a buy in the month of October. Over the previous four Octobers, XLV has traded higher three times with 2012 the outlier. [October Opportunity for These Sector ETFs]

Health Care Select Sector SPDR

ETF Trends editorial team contributed to this post.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.