Charting GE Healthcare as the Sector Sees a Pullback
Does United Healthcare's strong earnings report bode well for GE Healthcare?
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Thank you everyone for your comments on my recent GE Aerospace (GE) update. We recently locked in half of our position for an 84% gain.
One of the reasons we reduced our position on GE Aerospace is due to the stock’s relative weakness. Recently, GE Aerospace (left chart) fell below its 200-day moving average, even as the broader market, represented by the S&P 500 (right chart), reached new highs.
One reader asked about the a GE spinoff, GE Healthcare (GEHC) . Will this stock show some positive returns in the near future? GE Healthcare is off to a rough start in 2026, falling by about 15% year to date.
An Industry-Wide Pullback
GE Healthcare isn’t alone. The healthcare industry as a whole is underperforming the overall market.
On Monday, as the S&P 500 reached yet another new high, Eli Lilly & Co. (LLY) reached its lowest level in nearly six months. Lilly is breaking down from a descending triangle pattern (dotted lines), and has fallen below its 200-day moving average (red).
Over the past 10 years, Eli Lilly has achieved a cumulative return of over 1,200%. Lilly manufactures Mounjaro and Zepbound, two popular GLP-1 receptor agonists.
Charting the Healthcare Sector
The healthcare sector, represented here by the iShares Global Healthcare ETF (IXJ), has a similarly bearish look. It simply hasn’t been a good time to own this sector.
Charting GE Healthcare
GE Healthcare’s chart doesn’t look great. The good news is that there doesn’t appear to be anything company-specific at work here. This is just a case of being in the wrong sector at the wrong time.
GE Healthcare has formed a descending triangle, similar to the one on Eli Lilly’s chart. The stock is trading below its 50-day (blue) and 200-day (red) moving averages, similar to Lilly and IXJ.
The news isn’t all bad. Over the past year, there have been several strong bounces from the $68 area (black arrows). It’s fair to say that the stock is very close to a solid support level (horizontal black dotted line).
Earnings on Deck
Will that support hold? We’ll find out on Wednesday, when GE Healthcare is scheduled to report earnings before the open. Eli Lilly, Merck (MRK) , AbbVie (ABBV) and other notables in healthcare are also scheduled to report earnings this week.
Hopefully those companies will follow the lead of United Healthcare (UNH) , which had a decent report last week. United Healthcare is now up by 5% this year, and is finally trading above its 50-day (blue) and 200-day (red) moving averages.
United Healthcare beat earnings estimates by about 10%, while revenues came in 2% above projections. Earlier this week, Goldman Sachs raised its target price for United Healthcare from $400 to $435. Recently, Morgan Stanley raised its price target from $375 to $395, and Deutsche Bank from $304 to $360.
Related: Nikkei Sets Record as Tech, Consumer Plays Battle in Japan
At the time of publication, Ponsi was long GEHC and UNH.
