Now that it looks as if the Democrats have bribed enough senators to pass Obamacare, even though a majority don’t want it, it’s time to follow up on my August 2nd post about the ETF for healthcare IHF.
I wrote then, “With all the political debate about government run health care, are (the major healthcare companies) suffering or are they rising with the market? I took a look at the ETF of U.S. Healthcare Providers (IHF). From a high of about $64 in 2007 to a low near $25, a Fibonacci retracement of 38.2% at the $40 level had been the upper limit on IHF, until this last week.
“Monday evening came the announcement that a “group of six senators is going to eliminate the public option from their version of the health care reform legislation.” The Public Option “literally means that Americans would have the option to choose public health insurance. Having the public health insurance option means that Americans would have a choice of keeping the health insurance they currently have, buying health insurance from one of the many private health insurance companies, or choosing a public health insurance plan.”
“If you eliminate the public option, the major health care companies win and that was reflected in the stock prices.
“Here’s the way I see it. Go long IHF if you believe Obama’s health insurance won’t get passed. Go long IHF if you believe the public option will be excluded from the bill. Go short if you believe the insurance companies will have to contend with a government-run alternative. Right now all arrows ar green and pointing at the sky!”
Here’s the latest chart of IHF from MarketClub:
http://khronostock.com/blog/movermike/files/2009/12/ihf-daily-12-21
We are now at the 61.8% retracement, MACD is over bought, and we’ve run back up to the underside of the first bullish trendline. The arrows so far are all green, but here’s a place to be cautious if long the ETF. The circled area denotes where we were on August 2nd.
Please enjoy the article and comment below, email me at landfair3554@comcast.net or follow me @movermike
Discussion
No comments for “Healthcare Companies Re-visited”