The healthcare rally is simply starting, say two merchants
The health sector is regaining strength.
According to Quint Tatro, president of Joule Financial, the sector is shaking off past worries that weighed on the group.
"The general uncertainty about this entire health parameter was very worrying and weighed on the entire sector," Tatro said on CNBC's "Trading Nation" on Thursday. "We are now getting this relief and are seeing this particularly strong recovery in this sector again because the blue wave does not come into play."
Although votes are still being counted in several battlefield states, stocks rose Thursday as Wall Street appeared to warm to the idea of Democratic candidate Joe Biden in the White House and Republicans retained control of the Senate.
"The whole group … much like the general market was very concerned about this type of blue wave and what it would mean for the entire industry if the Democrats were able to" Medicare for All " ; enforce, "said Tatro.
The XLV, the ETF that tracks healthcare stocks, closed in the green on Thursday, rising less than half a percent after hitting a new all-time high the day before. Tatro said he wouldn't go after her right away. There are still a few more names he would add to his portfolio.
"Two of our favorites are two of the big pharma games, and that is Pfizer and Merck. First and foremost, these are names that have better records in the industry than most of the others," he said. "You're still pretty much in debt so you need to take this into account if and when we ever see higher interest rates. I doubt this will happen anytime soon, but Pfizer is trading 12 times forward earnings and Merck 13 times. Good value."
JC O & # 39; Hara, Chief Marketing Technician at MKM Partners, agrees with Tatro on the health care recovery and has a few of its own stocks to choose from.
"Some of the major outbreaks we are seeing today [Thursday] are from managed care stocks. United Health, Cigna, Anthem. They are all on the rise," O & # 39; Hara said on the same show before speaking dealt with the Technical Level of the Anthem.
"There was strong resistance on the upside at $ 310, great support at $ 230, and the fact that we can prevail well above the resistance suggests another uptrend, and I'm saying this because historically they usually come, when we see strong rallies after a big consolidation, "said O & # 39; Hara. "We believe there is at least another 20% more than it is now, so we could set a technical target of $ 400 here for Anthem."
The anthem fell 2.5% on Thursday.
Disclosure: Joule Financial and Tatro own shares in Pfizer and Merck
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