Health-care stocks have been on a tear, and with Johnson & Johnson and United Health Group reporting earnings on Tuesday, Todd Gordon of TradingAnalysis.com sees the sector rising even higher. <\/p>\n
The health-care-tracking ETF (XLV) is already up more than 16 percent year to date, and from a technical standpoint, the XLV is forming a \"pattern\" that leads Gordon to believe the ETF could hit an all-time high as soon as next month. <\/p>\n
On a chart of XLV, Gordon points out that the ETF has been making a continuous \"uptrend\" parallel channel, and there is still room to run on the upside. <\/p>\n
\"You can see that the market is more or less in the middle of this uptrending channel,\" the trader said Monday on CNBC's \"Trading Nation.\" \"[This] means with some strong earnings, we could continue to push up towards that upper end of that channel, right around the $83 region.\" <\/p>\n<\/p>\n
To play for that bounce to all-time highs, Gordon wants to buy the August monthly 79-strike call and sell the August monthly 82-strike calls, expiring August 18. Since Gordon is paying $1.48 total for the trade, or $148 per options contract, he would lose that amount if XLV were to close below $79 on the expiration date. <\/p>\n
But if XLV were to close above $82 on August 18, then Gordon would make $152 on the trade. <\/p>\n
Johnson & Johnson and United Health are two of the biggest holdings in XLV. Johnson & Johnson is currently up 14 percent year to date while UnitedHealth has also surged over 16 percent this year. <\/p>\n
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Originally posted here: <\/p>\n
Bet on health-care stocks ahead of earnings, trader advises - CNBC<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" Health-care stocks have been on a tear, and with Johnson & Johnson and United Health Group reporting earnings on Tuesday, Todd Gordon of TradingAnalysis.com sees the sector rising even higher. Continue reading