XLV pulled back sharply largely to do with a knee-jerk reaction to the Dems ‘Medicare for all’ (ie Europe-style government health service). Contrast this to the general Dec 2018 market collapse, and we see
- a 7.2% W1 rise - a 50% W2 pullback - a W3 repeating the move, and running to the 1.618 fib
The price carried on after December, but just anticipating a repeat of that move gives us an entry at 87.75 for 94.00. A 1.4% stop is comfortable (86.50) to give a 5:1 trade.
Healthcare is a typically strong summer defensive, and notably (on the daily chart), after the outlier of Dec 2018, kept in its long-term channel in the April collapse.