Medtronic shows breakout potential in health-care stock surge

The health-care sector has shown strong performance over the past two months, with the Health Care Select Sector SPDR Fund (XLV) rising over 6% from the end of June to early September 2024. This contrasts with the Nasdaq-100, which fell about 3%, and the S&P 500, which saw a modest increase of just under 2%. Amid this backdrop, Medtronic, Inc. (MDT) has emerged as a notable candidate for potential breakout, as identified by David Keller, a market strategist. Keller highlighted a bullish chart pattern known as an 'inverted complex head and shoulders' for Medtronic, indicating a long-term consolidation phase followed by a possible upward movement. The pattern is characterized by a significant low around $69 in October 2023, with subsequent higher lows forming on either side. The breakout above the trendline resistance in mid-August is seen as a pivotal moment for the stock. Additionally, Medtronic has recently surpassed its 150-week moving average for the first time since April 2022, signaling a shift in market sentiment. The stock has been trading within the $70-90 range since 2022, following a decline that began in September 2021. The current technical setup suggests that if Medtronic can break through Fibonacci resistance at approximately $94.50, it could see an upward trajectory towards $110. Overall, the health-care sector's outperformance and Medtronic's bullish indicators suggest a positive outlook for investors, marking a significant change in the stock's long-term trend and potential for future gains.