3 Health Care Stocks for Active Investors

The cost of health care may not be moving lower any time soon. But the cost of health care stocks? That’s a different story.

There’s no denying the heavy distribution in the health care stocks right now, as the selling and profit-taking that started with the biotechnology stocks has clearly spread to the rest of health care more broadly. And with many analysts looking to the potential of bullish seasonality in health care in the March-April-May timeframe, data-driven traders and active investors may find opportunities for short-term gains in these and other health care stocks far sooner than the spring.

With the Health Care Select Sector SPDRS ETF (NYSE: XLV) edging toward technically oversold territory as part of its oscillation back and forth in a trading range that extends back to mid-January, much of the more interesting action in the sector is taking place at the individual stock level. Here shares of companies like Varian Medical Systems Inc. (NYSE: VAR) have closed lower for four days in a row, the last two in technically oversold territory, after pulling back by more than 2% on Thursday.

The relatively modest selling in XLV (so far) also masks sharper declines in stocks like Zimmer Holdings (NYSE: ZMH). Shares of Zimmer were actually trading in technically overbought territory as recently as Monday’s close. Heading into trading on Friday, ZMH has lost two and a half percent so far this week, and will open oversold on the final trading day of the week.

Also moving lower ahead of trading on Friday are shares of MAKO Surgical Corp (NASDAQ: MAKO). MAKO has closed down for the past two sessions, both in technically oversold territory above the 200-day moving average. The stock earned “consider buying” ratings of 8 out of 10 late in trading on Thursday, and has a positive edge in the short-term of nearly two and a half percent.

No discussion on medical equipment stocks would be complete without at least a mention of the stellar performance of Accuray Inc. (NASDAQ: ARAY) on Thursday. Shares of ARAY rallied by more than 14% after providing earnings outperformance and positive guidance to analysts.

Want more stocks? Read our latest from 7 Stocks You Need to Know: “The Intel Pullback as Pitstop: Three Down, Six Up”.

David Penn is Editor in Chief of TradingMarkets.com