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One health-care stock suggests the whole group is ready for recovery

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Health care stocks under pressure, but one could be on the mend

Health care has been clobbered during the past week.

The sector has fallen 5% in the past five sessions, while the broader market has remained flat. It is also one of just two S&P groups that remain in a correction, having fallen more than 10% from a 52-week high.

One of the sector's largest components suggests a recovery in the making, says Matt Maley, equity strategist at Miller Tabak.

"The poster boy for this whole sell-off is UnitedHealth," Maley said on CNBC's "Trading Nation" on Monday. "On a technical basis, its weekly RSI chart, it's the most oversold it's been since that crisis and also it went down to the $210 level. That was the same level that it bounced off of in 2018, so it made a nice double bottom, so that's positive."

The stock's relative strength index, a momentum indicator, plummeted on a weekly basis to below 37 this month. The 30-level typically suggests extremely oversold conditions.

"Now I do have to admit it did break below its 100-week moving average, which has provided great support for the stock since 2010. However, I think that had more to do with the algos and the thinness in the marketplace than any kind of fundamental issue," said Maley. "If it can regain that 100-week moving average any time soon, it should give the stock a lot more confidence and I think the whole group as well."

Chad Morganlander, portfolio manager at Washington Crossing Advisors, is bullish on the sector for the long haul.

"We are actually overweighting the sector now based off of headline risk. The multiples have contracted greatly, but when you look for forward-looking revenue growth as well as earnings growth with stability regarding whatever the economic backdrop is, we believe that this sector is actually one that you can find true value," Morganlander on said on the segment.

Drilling down into the sector, Morganlander sees the best opportunity in managed care and pharmaceutical companies. His firm holds health-care stocks including Pfizer, Procter & Gamble, Becton, Dickinson & Co., Merck, and UnitedHealth.