The decision by
) to acquire
) has restored attention to a sector that has often benefitted from
seasonal strength in the first half of the year. Shares of BMY have
from new, yearly highs, closing lower for five out of the past six
trading days, including trading lower by nearly 1% on Monday, the
day of the INHX announcement). BMY has finished lower for three out
of the past four sessions.
What other stocks from the health care sector are selling-off
and moving toward levels where buyers historically entered the
market to take advantage of lower prices? Also trading just off
52-week highs are shares of
). ISRG pulled back by nearly 2% in Monday's session and is trading
just outside of technically oversold territory.
Merck & Company
) shares are also headed for their second consecutive lower close
as traders trim gains from the stock's recent, new high. Nearing
its lowest close of the past week, MRK is still up 9% since its
last significant, short-term pullback in mid-December. Shares of
MRK are trading in neutral territory and will require significant
additional selling before reaching
Both ISRG and MRK have neutral ratings ahead of trading on
Tuesday. But both stocks also earned ratings upgrades within that
"neutral" category and, as such, may be worth watching. Additional
weakness in the short-term likely will increase the edges in these
stocks, boosting their ratings potentially from "neutral" to
"consider buying" before the end of the week.
Traders and active investors looking to avoid single-stock risk
may want to keep an eye on healthcare ETFs like the
Health Care Select Sector SPDRS ETF
), which is trading in
territory ahead of Tuesday's open. The ETF has been rangebound for
the past five days, trading at its highest levels since July.
Another option for traders is the
iShares S&P Global Healthcare Sector Index Fund
(IXJ). IXJ has closed lower for three out of four days and finished
just outside of oversold territory as of Monday's finish.
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is Editor in Chief of TradingMarkets.com.