(Premium) February Health Care Outlook

Remember how we said the theme for January was failed moves? Check out this massive reversal in the Health Care sector:

We were skeptical about Health Care’s ability to absorb those 2020 relative highs without any pushback, and that kept us from upgrading the sector in the final months of 2022. We were rewarded for our patience, and we recently moved our rating on the sector to overweight from equalweight on the pullback.

We believe that the long-term relative uptrend remains intact and that this is an opportune time to increase exposure to the group. Of course, should the weakness we’ve seen year-to-date continue, we’ll be forced to reassess that opinion. Why are we still bullish?

In our December outlook we said it this way:

Health Care is one industry away from being a leader.

Health Care providers were already at new highs, and so was Pharma. The problem was in the health care equipment space, which tends to trade more like the Tech sector than the rest of its Health Care companions.

Well, look what happened yesterday.

Stryker is one that’s helped to push the industry over the top. If it’s above 280, we want to own it with a target of 380.

Hologic is another. If it’s above 80, we think it goes to 93, with a longer-term target of 113.

And Boston Scientific, which we highlighted last month, is breaking out of a 3-month base. We’ve got a target of 60 if BSX is above its 2020 highs of 46.

Click on each section below to see the rest of our February outlook:

Fixed Income, Currencies, and Commodities Communication Services Sector Consumer Discretionary Sector Consumer Staples Sector Energy Sector – UNLOCKED Financials Sector Health Care Sector Industrials Sector Information Technology Sector Materials Sector Real Estate Sector Utilities Sector

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