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Health Care Hopping Into 2009?

As you can see from the chart below, since December 17th the Health Care Select Sector SPDR (XLV) has climbed about 7%. Conversely, the broad market is down 3%.

Investors have been pouring into the sector as a bet that pharmaceutical firms and other health related companies will perform better than the overall market in this time of economic uncertainty.

The investment thesis is simple. Even if money is tight, the last place people will make cuts is on their medicine or therapy.

And that thesis has paid. In the last month Merck , Lilly and Pfizer are all trading substantially higher.

Will this bear market remedy keep working in the new year?

A lot of investors are chasing dividends, explains Pete Najarian. That’s why Merck and Pfizer have popped recently.

If you’re looking for trades keep an eye on the names that get a lot of attention during the upcoming JP Morgan Healthcare conference, he adds. Personally, I like Celgene , Gilead and Teva for their pipelines.


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Trader disclosure: On Dec. 30th, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Macke Owns (MSFT), (TM), (WMT): Pete Najarian Owns (AAUK) And Is Short (AAUK) Calls; Pete Najarian Owns (DOW) Call Spread; Pete Najarian Owns (XHB) Call Spread; Pete Najarian Owns (ENER) Call Spread; Tatro Owns (JPM), (WPRT); Quint Tatro Is The Principal Of Tatro Capital; Tatro Capital Owns (INTC), (SDP), (DXO), (WPRT)’ Tatro Capital Is Short (AAPL), (GOOG), (XOM), (CVX)

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Terranova Owned (GS) On 6/3/08; Terranova Is Co-Portfolio Manager Of The Virtus Diversifier PHOLIO; Virtus Diversifier PHOLIO Owns (IGE), (DBC), (DBV)

Terranova Is Chief Alternatives Strategist Of Virtus Investment Partners, Ltd.; Virtus Investment Partners Owns More Than 1% Of (ABD), (ARE), (BIG), (OFC), (DLR), (EXR), (IGE), (MAC), (DBC), (DBV), (SKT), (UA), (CLB); Virtus Investment Partners Owns More Than 1% Of Seagate Tax Refund Rights