Health care (NYSEARCA:XLV) saw a spike in oversold readings – typically a good tactical entry point, said Jonathan Krinsky, chief market technician at BTIG.

The healthcare sector (XLV) is the worst performing sector year-to-date by over 3%, up only 5.84%, and down 4.23% from the past month.

“While trends remain difficult to defend, from a contrarian standpoint it looks interesting heading into 2025,” said Krinsky in a technical strategy note.

The sector saw most stocks with a four-week low and a relative strength index below 30 since the spring, he said. “These surges are typically good for tactical bounces.”

Medical devices (IHI), on the other hand, did not decline with the health care’s (XLV) selloff last week, and mains in a strong technical position near its highs.

Biotech (XBI) is down 2.72% from a month ago, but its trend has remained constructive in the last days. It is up 3.55% from five days ago.

“Perhaps last week’s false breakout and shakeout was what was needed for biotech (XBI) to finally breakout?”

Two health care stocks that look “timely,” according to Krinsky:

• Both Bristol Myers (BMY) – Up 38.12% in the last six months.
• Gilead Sciences (GILD) – Up 32.48% in the last six months.

Both have displayed bearish-to-bullish turnarounds in their charts over the last few quarters, Krinsky said. “The recent consolidations make both of them timely here, in our view.”