A NUMBER OF HEALTHCARE STOCKS CONTINUE TO TRADE ABOVE THEIR 200-DAY AVERAGES -- NEW ADDITIONS INCLUDE ABBOTT LABS, GILEAD AND MEDCO HEALTH SOLUTIONS

HEALTHCARE GIVES MARKET A BOOST ... On January 27, I wrote about upside leadership coming from healthcare stocks, and suggested that more of that could provide some support for the rest of the market. That's certainly the case today. Better than expected earnings from Merck and Schering Plough are giving a big boost to pharmaceutical stocks (more on that later). Biotechs and health insurers are also strong. In that earlier January message, I showed a number of healthchare stocks that had climbed over their 200-day averages. That earlier list included Humana and Unitedhealth Group. Charts 1 and 2 show both stocks continuing their upward climb. Their relative strength lines are still climbing as well. I'm adding Medco Health Solutions to that list of healthcare leaders . Chart 3 shows the stock climbing 5% today and trading at a new four-month high. It's also trading above its 200-day moving average. A number of biotech and pharma stocks are doing the same.

Chart 1

Chart 2

Chart 3

ABBOTT IS A NEW DRUG LEADER ... The January article showed Bristol Myers Squibb and Schering Plough trading above their 200-day lines. Chart 4 shows BMY trading well above that new suppport line. Chart 5 shows SGP regaining its 200-day line today. Both stocks are trading 4% and 7% higher in today's trading. I'm adding Abbott Labs to the list of pharma leaders. Chart 6 shows ABT reaching the highest level since November and trading well above its 200-day line. All three big pharmas sport rising relative strength lines.

Chart 4

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GILEAD IS BIOTECH LEADER... The biotech group is also showing positive relative strength. The strongest individual chart in that group belongs to Gilead Sciences. Chart 1 shows the biotech leader trading over 52 today for the first time in five months. It has also cleared its 200-day line. The relative strength ratio (below chart) is trading at a new high.

Chart 7

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