Trading Nation

The soaring sector that could keep rallying

The Obamacare trade

Health-care stocks enjoyed healthy gains on Thursday, with hospital and medical equipment stocks rallying after the Supreme Court's ruling in favor of Obamacare, and Humana and Zoetis both jumping amid takeover talk.

Read More Obamacare decision spurs health care rally

But the health-care rally isn't just about one day's news. Over the past 12 months, the S&P 500 health-care sector is up 23 percent, more than tripling the gains of the index as a whole.

And according to Piper Jaffray analyst Craig Johnson, health-care stocks still have plenty of runway ahead.

"We continue to believe that this health-care trend and outperformance will continue," Johnson said Thursday on CNBC's "Power Lunch."

Examining the iShares Healthcare Providers ETF (IHF), Johnson finds that "the chart is continuing to make higher highs, higher lows, we're above our 40-week moving average, above the uptrend support line—we're not seeing any sign of a trend change happening yet."

"From a chart perspective, we want to continue to remain long this sector and long this ETF, because that's providing positive alpha for one's portfolio," Johnson concluded.

Boris Schlossberg, a strategist with BK Asset Management, said that from his perspective, "The technicals and the fundamentals really line up, because we clearly have a secular change towards health care, particularly with today's ruling helping the sector."

However, not everyone is bullish. Much of the recent gains for health-care stocks have come not on the back of earnings growth, meaning that valuations have been rising.

"If you have some type of a scare, some type of a retrenchment of stocks, this seems to be an area that could take a pretty good wallop, just because valuations have run so much compared to other areas of the market," said Curtis Holden, senior investment officer at Tanglewood Wealth Management.

But that's not to say he disagrees with Johnson's bullish technical case.

"I don't know that I'd be trying to short them, since there's just so much momentum behind them," Holden added.

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