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Carter Worth And Mike Khouw ON XLV: Health Care Is Going Strong

Craig Jones
·1 min read

Carter Worth of Cornerstone Macro shared with the viewers of CNBC's "Options Action" his bullish view on Health Care Select Sector SPDR Fund (NYSE: XLV). Health care was the best performing sector the day after Election Day and the second best performing of the week, he said.

The health care sector has the strongest top line growth in the past three years, Worth said. He added it is also trading at its cheapest valuation to the S&P 500 in the last five years. The health care sector has been underperforming the S&P 500 since 2015, and Worth believes the sector is going to outperform the S&P 500 going forward. He showed a chart of XLV that shows it ready to break out above its resistance. Worth said he is a buyer on health care.

Mike Khouw suggested a simple options strategy as a way to get a long exposure to XLV. He would buy the January $114.33 call for $2.10. The trade breaks even at $116.43, or 5.92% above the closing price on Friday. If the stock moves higher, Khouw would consider selling an upside call or a near dated call against it.

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