martedì 17 ottobre 2017

Traders Are Making Bullish Bets On Health Care ETFs (XLV)

Healthcare stocks are moving higher today and there is accompanying call buying in November options that are listed on the largest name in the sector in terms of asset size, XLV (SPDR Health Care Select, Expense Ratio 0.14%, $17.5 billion in AUM).

The November 84 calls in XLV are catching some trading interest today, and with XLV trading with a high $82 handle today on the move higher, these options are approximately 1.3% out-of-the-money right now. The 52-week high in XLV is $83.41 and was touched just eight trading sessions ago before the sector sold off a bit.
The top five holdings in XLV are as follows: 1) JNJ (11.57%), 2) PFE (6.85%), 3) UNH (5.93%), 4) MRK (5.48%), and 5) ABBV (4.57%).
Corporate earnings season is certainly a consideration here (as are headlines regarding the fate of “Obamacare” given where we are on the calendar and the nature of the recent trading in this space, and when we look further we see the top holdings that are mentioned above are slated to report their quarterly results as follows: 1) JNJ (reported this morning before the bell and the stock has rallied over 2.2%), 2) PFE (10/31 AM), 3) UNH (reported this morning before the bell and the stock is up nearly 5%), 4) MRK (10/27 AM), and 5) ABBV (10/27 AM).
Other broad-based “Healthcare” ETFs that we are watching closely given the tone of recent trading here in an earnings environment include VHT (Vanguard Healthcare, Expense Ratio 0.10%, $7.1 billion in AUM), IYH (iShares U.S. Healthcare, Expense Ratio 0.44%, $2.1 billion in AUM), FXH (First Trust Amex Biotechnology, Expense Ratio 0.61%, $1 billion in AUM), FHLC (Fidelity MSCI Health Care, Expense Ratio 0.08%, $881 million in AUM), and RYH (Guggenheim S&P Equal Weight Healthcare, Expense Ratio 0.40%, $658 million in AUM).
Levered Bull CURE (Direxion Daily Healthcare Bull 3X, Expense Ratio 1.09%, $153 million in AUM) is also on our radar today, after seeing a nice lift on the bullish action in the Healthcare segment. Although trading volume in this name has been below average lately, it could certainly increase in the near term given all of the observations we made above.
The Health Care SPDR ETF (XLV) was trading at $82.88 per share on Tuesday afternoon, up $0.82 (+1.00%). Year-to-date, XLV has gained 21.14%, versus a 15.23% rise in the benchmark S&P 500 index during the same period.
XLV currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #1 of 33 ETFs in the Health & Biotech ETFs category.

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