The top performing S & P 500 sector so far year-to-date is health care, up approximately 6% versus 2% for the S & P 500 Index. Relative momentum is improved for the sector not only from a short-term perspective, but also an intermediate-term perspective, supporting more outperformance for the balance of Q1. With this in mind, we highlight a compelling intermediate-term breakout in DaVita (DVA) . A helpful tool for visualizing sector rotation is in a Relative Rotation Graph. In a 12-week RRG of Sector SPDR ETFs versus the S & P 500, healthcare (XLV) has an upturn, meaning it has improved momentum relative to the market. It has also begun to turn rightward, indicating outperformance. The RRG has an inherent clockwise rotation, meaning that healthcare should continue to outperform the SPX in the weeks ahead assuming this holds true. DVA has a trading range breakout that marks a resumption of its long-term uptrend. The breakout is associated with renewed intermediate-term momentum per a new weekly MACD ‘buy’ signal. An upside objective can be derived by a Fibonacci extension of roughly $193. Former resistance in the $166-$168 zone is now initial support. A quick reversal below that level would support reducing new long positions. For longer-term positions, more important support to watch is at the rising 200-day moving average near $149. In its ratio versus the S & P 500 Index, DVA reversed a secular downtrend last year with a breakout above the monthly cloud model. This suggests that DVA now has bullish long-term prospects versus the S & P 500. Similar to its setup in absolute terms, DVA is pushing out of an intermediate-term trading range versus the S & P 500, supporting outperformance over that timeframe as well. —Katie Stockton with Will Tamplin Access research from Fairlead Strategies for free here . DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer. Fairlead Strategies Disclaimer: This communication has been prepared by Fairlead Strategies LLC (
