Health care suffers the worst week of 2019 and technician sees more pain

Health care received a health alert this week.

"When we break down the graph here, you can see a clear violation of the uptrend, you can see the discrepancy between the RSI and the price, and it looks like the next support will hit $ 85. -basis will start the next support at $ 74, "Johnson said.

The XLV ETF, which owns companies such as Johnson & Johnson and Pfizer, finished Thursday below $ 86. A move to $ 74 represents a 14% drop from current levels.

"We are not buying at the moment.We are going to wait for the upheaval.We think there is more downside," said Johnson.

Mark Tepper, President and CEO of Strategic Wealth Partners, said investors should remain stable in the face of rising short-term adverse conditions.

"In the long run, I like them, quite frankly, everything is political, it's 100% a response to the possibility that Medicare for All will become a reality that will crush the sector," Tepper told Trading Nation on Thursday. .

Senators Democrats Bernie Sanders, Elizabeth Warren and Kamala Harris have expressed support for the Medicare for All bill providing for universal health coverage, while President Donald Trump is committed to taking care of health care after the presidential election of 2020.

Several Medicare for All proposals are circulating in Congress, some of which would essentially abolish private insurance, while others would simply create a public system and leave private plans largely in place. Yet, the industry is worried. On Tuesday, UnitedHealth President David Wichmann said that Medicare for all would "destabilize the country's health system".

Mr. Tepper suggested that the concerns about Medicare for all were exaggerated.

"I do not think Medicare for All exists, so I think there's a huge opportunity here," said Tepper. "In the short term, I think there are political hurdles, but as a long-term investor, I think you have the opportunity to enter at a good price now."