{"id":21547,"date":"2024-01-31T07:30:34","date_gmt":"2024-01-31T12:30:34","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=21547"},"modified":"2024-01-31T07:30:34","modified_gmt":"2024-01-31T12:30:34","slug":"waiting-for-healthcares-next-big-breakout","status":"publish","type":"post","link":"https:\/\/stage.jeffclarktrader.com\/market-minute\/waiting-for-healthcares-next-big-breakout\/","title":{"rendered":"Waiting for Healthcare\u2019s Next Big Breakout"},"content":{"rendered":"

Recently, we’ve been discussing the power of trend continuation setups<\/a>.<\/p>\n

They keep you on the right side of the market, making sure you don’t trade against the larger trend.<\/p>\n

They also offer great reward-to-risk opportunities. It’s not uncommon for trend continuation setups to return 100% or more on a trade.<\/p>\n

When you have a strategy that consistently delivers great returns and is right more often than wrong, you have a recipe for building long-term wealth.<\/p>\n

The last trend continuation pattern we looked at was in XHB, the SPDR S&P Homebuilders ETF. And while we’re waiting to see whether the pattern will break out higher or not, I have another setup to share with you.<\/p>\n

Look for the Bull Flag<\/h2>\n

This time, we’re looking at a healthcare ETF, XLV.<\/p>\n

I first put XLV on your radar on December 20<\/a>. At the time, the ETF was getting ready to break out of a large triangle pattern.<\/p>\n

The triangle had been taking shape since April 2022. Prices finally broke out of the pattern on January 2.<\/p>\n

And now, we’re seeing a smaller trend continuation pattern that we’re going to examine closely.<\/p>\n

This kind of setup is one of my favorites.<\/p>\n

When a large pattern breaks out, like the triangle in XLV, it can be difficult to figure out where to place a stop loss.<\/p>\n

Often, a large pattern also comes with a larger stop loss.<\/p>\n

That’s why waiting for a secondary pattern to take shape is a great strategy. A little bit of patience can pay off in a big way.<\/p>\n

All you have to do is wait for the secondary pattern, which will always be smaller than the first, to break out.<\/p>\n

In the case of XLV, this secondary pattern is a bull flag.<\/p>\n

Let’s check it out on the chart below.<\/p>\n

<\/p>\n

\"Image\"<\/p>\n

A bull flag occurs after a strong run-up in prices, and the market has to take a breather. This part is the same for all trend continuation patterns.<\/p>\n

In the case of XLV, prices traded from $122.60 to $141.55 over 73 days without any major pullbacks.<\/p>\n

That sets the stage very nicely for our bull flag. A bull flag is a controlled pullback that is contained by parallel lines.<\/p>\n

<\/p>\n

\n
\n

Free Trading Resources<\/strong><\/p>\n

Have you checked out Jeff’s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career \u2013 at zero cost to you. Just click here<\/a> to check it out.<\/p>\n<\/p><\/div>\n<\/div>\n

<\/p>\n

I’ve drawn the outlines of the flag using the blue trendlines.<\/p>\n

What we’re waiting for next is a breakout above the upper trendline of the pattern. This will signify that the pullback is over, and the next strong trending run is about to begin.<\/p>\n

Finally, we can use the base of the pattern as a stop-loss level. Currently, that level is $137.<\/p>\n

And because my target for this pattern is around $150, this would give us a very favorable risk-to-reward ratio on the trade.<\/p>\n

Happy trading,<\/p>\n

\"Signature\"<\/p>\n

Imre Gams
Analyst, Market Minute<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Prices finally broke out of a pattern that has been taking shape since 2022.<\/p>\n","protected":false},"author":55,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[76],"newsletter-type":[],"ticker":[],"class_list":["post-21547","post","type-post","status-publish","format-standard","hentry","category-uncategorized","publication-market-minute","person-imre-gams"],"acf":[],"ai_tts_audio_outdated":false,"ai_tts_legacy_post":false,"_links":{"self":[{"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/21547","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/55"}],"replies":[{"embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=21547"}],"version-history":[{"count":0,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/21547\/revisions"}],"wp:attachment":[{"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=21547"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=21547"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=21547"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=21547"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=21547"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=21547"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=21547"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}