Kryptonite for Your Portfolio? Superman Sizes Up the Health Care Sector's Dip!

Faster Than a Speeding S&P 500!

Greetings citizens of Earth! Superman here your friendly neighborhood reporter (when I'm not busy saving the world of course!). I've been keeping an eye on the financial markets and something caught my super hearing: the Health Care Select Sector SPDR Fund or XLV had a bit of a tumble in May. Over 5% down while the S&P 500 soared? That's like Lex Luthor winning a popularity contest – unexpected and definitely suspicious! This underperformance was so bad it broke records dating back to 1998. But don't worry hope floats like me over the Daily Planet building.

Support is Coming!

Now I'm no financial wizard (that's probably someone Lex is funding) but even I can see that XLV is approaching some serious support levels. Think of it as hitting the Fortress of Solitude for some much needed R&R. There's a rising trendline from way back in 2009 plus a cluster of lows from 2021 2023. These converging lines are like a Kryptonian force field potentially ready to bounce XLV back up. Of course Lex might try to rig the game but I'll be watching!

The Big Three: Can They Lift Off?

Here's where things get interesting. A surprising number of XLV's components (34 out of 61) actually saw gains in May. But to really get XLV flying again we need the big guns to step up. I'm talking about Eli Lilly Johnson & Johnson and AbbVie. Together they make up about 27% of the fund. If these titans can't rally XLV might as well be grounded by a red sun.

Eli Lilly: A Lilly Pad for a Leap?

Let's start with Eli Lilly (LLY) the heavyweight champion of XLV at 12%. LLY hit an all time high in August 2024 but then took a 30% nosedive. It's been bouncing around within a downward sloping channel but now it's fallen 20% since April. Historically these big dips have been followed by some pretty impressive rebounds. Plus the Williams %R indicator is suggesting LLY might be emerging from an oversold condition. Seems like the perfect setup for LLY to leap over tall buildings!

J&J and AbbVie: Bouncing Back into Action?

Johnson & Johnson (JNJ) has been trending lower since 2022 while AbbVie (ABBV) has been on an uptrend. However both have experienced various swings within their respective trading channels just like LLY. Now that both JNJ and ABBV have sold off from their 2025 highs it could be an opportune time for the next bounce to commence. Let's hope they can muster the strength of a Kryptonian sun!

Rotation to the Rescue?

From a broader perspective market rotation is crucial for sustained uptrends. If those overextended sectors start losing steam capital could flow into underperforming areas like health care. It's like Lois Lane always saying 'There's always hope Clark!' So keep your eyes on the skies (and the markets) folks. This could be the moment XLV turns from a mild mannered fund into a true superhero of your portfolio. Until next time this is Superman signing off! Up up and away… to check on Lex Luthor!