Market Backdrop
Stocks sold off hard, giving back all of the prior day's gains and a bit more. The reminder for the day: on big up moves, take some profit. You never go broke taking a profit.
Healthcare stood out as a bright spot while tech stayed volatile. Money flowed into it as a safe area, with the added view that a divided government could push more funding toward the sector. The healthcare sector ETF (XLV) has been in an uptrend, which is why healthcare names got the focus. All three picks fell less than the broader selloff. In a weak market, the goal shifts to finding what is down less.
HCA Healthcare (HCA)
HCA is one of the largest hospital operators in the United States - emergency rooms, surgeries, inpatient care, and the facilities behind them. Long-term bullish case rests on three drivers: more money expected to pour into healthcare, Medicare, and Medicaid under the new government setup; baby boomers aging (more people born then than any other time in history); and healthcare spending rising naturally as people get older. HCA is one of the only uptrends left in the S&P 500. A double bottom formed around June-July, and the long-term trend is up.
HCA held slightly green on a red day, then slipped about a quarter percent. The stock ran well early in the year, sold off sharply, and is recovering but stalled at a key level. After double-top highs near 555, it pulled back; an old peak near 511-512 now acts as a hurdle, right where it sits now and where it closed the prior day. Bulls need a clean break above that to retest highs near 556.
Downside levels: a gap from 470 to 492, and a post-earnings low near 440. Price is holding above the upper edge of its channel, now a possible support. The 5-day exponential moving average sits near 492, close to the prior day's lows and the trend line. RSI stays overbought above 70, which in a trending market points to more strength; a drop back below 70 would turn bearish. Volume nodes cluster at 530-540 and 495-505, with the heaviest trading (point of control) near 469 - the key support if it falls back.
Trade structure: long-term bullish, but take risk off the table. Buy the June 17, 2027 500-strike call, going for about 67 before the open (possibly cheaper with the market down). Cover it by selling the out-of-the-money 580 call, bringing in 32. Net debit 35, so all-in break-even is 535. Above 580 the position is in profit and still holds time value. Warning sign: do not want price breaking below the 20-day moving average. The moving average recently crossed above the 200, then lifted off the 20 and 10; a pullback can bounce there, but a break would be bad.
Intuitive Surgical (ISRG)
Intuitive Surgical makes the Da Vinci robot, an assisted surgical system letting doctors perform invasive procedures remotely with robotic precision. This is where healthcare looks like technology, without the worry over how AI or data-center spending affects it. Technology meeting surgery and healthcare makes a strong story. Patients could get top care without flying somewhere.
Third-quarter revenue climbed 22% to $3 billion. Worldwide procedures grew 15%. More people are having surgeries as the population ages and lives longer, which needs companies like this.
ISRG was positive at the segment's start, then fell about 2.5% to 471.05. Technically, a W-shaped bottom formed around 350, with a moving average cross above the 10, 20, and 200, followed by a pullback and bounce - a sign of trend in that direction.
On the W pattern: intraday lows hit 328.57. A W means price bounced off a similar point and held before rallying, signaling strong support; the second low came in higher than the first, pointing to more strength. A gap near 400 acted as a ceiling several times, then price broke above it after repeated tests. Past that, 492 and 512 (from a sideways period) mark resistance. To the downside, a gap began at 444 with relative lows near 430. Trend accelerated - an early blue channel shifted into a steeper, sharper white channel. Exponential moving averages at 5, 21, 63, and 251 (weekly, monthly, quarterly, yearly) were all crossed above in quick succession; the 5-day sits near 460, and the yearly 251 and monthly 21-day converge near 439 for important support. RSI crossed back below 70 to 66, still high; a cross back above 70 would support a bullish view. Volume thins above 470-496 and picks up again near 550, with smaller nodes near 450 and 430.
Trade structure: bullish, played with a bull put spread so that even if wrong, the position still wins. Buy the January 15, 2027 400-strike put for about $4; sell the same-expiration 410 put, bringing in about $8. Net credit $4. The short strike sits about 30 points below the gap near 440, so price can fall roughly 70 points - from here down past the gap - and still keep the $4. Risk is $10 to make $4, a potential 40% return, with good odds. Only 71 days to expiration. Holiday-shortened trading weeks around Thanksgiving, Christmas, and New Year's help, because time decays against the option holders hoping for a move their way.
Moderna (MRNA)
Moderna is known for its COVID vaccine but is also working on a partnership with Keytruda (Merck, MRK) on a drug now in phase three that reduces melanoma-related deaths by about 42%. MRNA has been in an uptrend since the start of this year.
MRNA fell 4.3-4.5% to 246.38, more than the other picks but still less than many names in the selloff. Technically, it hit old highs near 255 but could not hold above them. A steep white upward trend line is still in play, though price fell back inside its original upward channel. The bottom of a red candle near 217 is one support; the 5-day EMA at 238.25 lines up with the trend line, and a break below could open the door to the 21-day monthly EMA near 219. RSI is muddled - a green rising short trend line still holds, but price failed to break a longer falling red trend line and sits back beneath it. Look for a stronger breakout beyond either line for direction. Volume nodes sit near 220 and 200.
Trade structure: bull put spread, January 15, 2027. Buy the 200 put, sell the 210 put, for about a $4 spread, 71 days out. Price can go up, sideways, or down and still stay profitable.
