Add Healthcare Before Too Late

Many stock analysts are recommending adding healthcare stocks to your portfolio and many mutual funds have been increasing their positions in healthcare sector.  Why are the investors attracted to healthcare sector?  Currently, many large healthcare companies have one of the lowest P/E in the market.  Also, there is that healthcare reform thanks to President Obama, which will provide higher premium revenue to these healthcare companies once it is implemented by the Government.  Let’s take a look at a couple of healthcare stocks.
UnitedHealth (UNH) and WellPoint (WLP) come to mind when we think of healthcare companies.  UNH has nicely retrace back since its low last March and I’m confident it will continue to go higher in 2010.  Looking at a one year chart below, there is a major support line at $35 that extends more than 1 year.  There is also an upward support line.  Using these two pieces of information, it looks like a good entry point to go LONG would be around $30 range.

WLP is another healthcare stock that has retraced back from its low in 2009.  In looking at one year chart, it looks like a good entry point would be around $55 range.  Interestingly, the price characteristics looks very similar to UNH, where the slope of the upward support lines are also similar.

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