The iShares U.S. Pharmaceuticals ETF (IHE) is up 9% since July 2015, when it hit a fresh all-time high.
That's a 9% gain in nine years. The S & P 500 is up more than 155% over the same time period. Few people talk about IHE, especially with so many other popular growth ETFs doing so well.
We can understand why: IHE actually first surpassed that 2015 high in early 2021, but a long and volatile trading range resulted, which the ETF just broke above earlier this year. Indeed, the recent four-month advance from the October 2023 low to the February 2024 high totaled 26%, which was among the best ETFs we track over that time. IHE has been working off extremely overbought readings since then.
But with the last two breakouts through major high points leading to nothing but frustration, traders aren't overly eager to deploy capital into the ETF right now. So, why are we writing a constructive piece on IHE? All of the back-and-forth movement since 2015 has produced what could be a monstrous bullish pattern. This is how it appears in log scale.
Investors must recognize that this is a monthly chart, so the short, and sometimes fierce, swings aren't as noticeable here as they are on the daily chart. But we're trying to capture a major breakout from an area that's done next to nothing in nearly a decade. And that kind of shift can only be seen properly by zooming way out.
Two biggest holdings Eli Lilly (LLY) and Johnson & Johnson (JNJ) each have a 23% weight within IHE, thus, the two big s.
