Cantor Morning News | Healthcare

We talked yesterday about relative outperformance of device makers in front of the MDT earnings. Well those earnings and outlook were a major disappointment and the entire med devices sector were woeful underperformers - MDT,SYK,TMO,ZMH,NUVA - take your pick ,it was ugly. Most other healthcare sectors were weak in sympathy with the market downturn. MHS was the most notable exception - had a good bid to it for the entire day and one of the few on our board ending the day in green. Our volumes were about 50/50 across the board, and we had a number of nice crosses/2 way situations ranging from the extra large -AMRN, to ALR to MGLN to NWHK.

DRG Index broke down through channel support and appears to be initiating wave c of an a-b-c pattern with 245 being the approximate price target. It is slightly short term oversold so could bounce or churn for a few days before resuming its selloff

HMO Index after completing an ending diagonal on Aug. 11 had a swift three wave correction look for short term support in the 1420 area and is also short term oversold. HMA had a bullish engulfing day on Aug 20 and held support yesterday in face of market sell off as well as weakness in UHS and CYH. OCR broke out of short term consolidation area after sharp selloff , price target 15/14.50. HSP is in a expanded flat and churning level since sharp selloff which began due to earnings release on July 28 price target 46.50/46.

MCK bounced about 10 days ago due to positive Barron's article. It is trading in a sideways consolidation pattern and needs to keep key support area of 59.50 established by a hammer pattern on July 30 and subsequently a bullish engulfing pattern on Aug 12. The 59.50 level would be a significant

SYK and ZMH both significantly oversold due to poor earnings report by MDT and worries of government reimbursement. Likely to bounce P&F targets are still significantly lower in the 35 price range for each.

Macro/Technicals

XLV: 28.18; -.62; -2.15%
DRG: 282.88; -3.94; -1.37%
HMO: 1433.23; -22.22; -1.53%
BTK: 1045.82; -19.26; -1.81%

Cantor Flows

Biotech/Pharma: AMRN PFE GILD REGN

Healthcare Services: BCR ALR MHS CVD NHWK CLDA BIOS

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