It feels like yesterday—locked at home, glued to the news, airports shutting down, vaccine headlines everywhere.
That was 2020 and healthcare stocks were some of the biggest winners during that chaos. Pfizer, Moderna, AstraZeneca—they were ripping higher.
But that didn’t last.
Since peaking in March 2020, healthcare stocks have been quietly underperforming.
The ratio of Equal Weight Health Care vs Equal Weight S&P 500 ($RSPH / $RSP) has been trending lower ever since.
Now we’re back to where it all started.
The ratio is sitting right at a major support level. This is the same area that marked the bottom in 2016—right before Trump’s first term.
This is a key level. No need to complicate it.
What adds weight to this chart is the divergence in momentum. The 14-period RSI is printing higher lows while price makes lower lows. That’s a bullish divergence. It tells us the selling pressure may be fading.
If healthcare is going to catch a bid, this is where it makes sense.
And no, it’s not because of another pandemic. It’s rotation.
Sectors fall out of favor, they base, and sometimes they come back. That’s how it works.
I’m not expecting sustained leadership—just a little relief and fresh air.
However, if buyers don’t step in now, this massive top will be completed and the path likely leads to more underperformance.
