Top Down: A Strong Industry Group's Strongest Stocks. Healthcare Equipment Companies in the XHE ETF Ranked and Graded
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📘 Stock Cheat Sheets — Relative Strength Report (Deep Dive: Healthcare Equipment)
Finding the “Best of the Breed” in a Leading Sector
1. Market Context: Top-Down Analysis
In our previous broad market scan, we identified Healthcare Equipment (XHE) as a top-performing Industry Group (”Grade B” / +8 RSR Variance).
The SPDR S&P Health Care Equipment ETF (XHE) seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the S&P Health Care Equipment Select Industry Index. This index represents the health care equipment segment of the S&P Total Market Index, which comprises the following sub-industries: health care equipment and health care supplies.
Now, we execute a Top-Down Analysis: drilling into the individual components of the ETF to find the specific stocks driving this strength.
The Setup: The group as a whole is seeing massive institutional inflows. The goal now is to separate the leaders (high relative strength) from the laggards, with a specific focus on finding actionable setups that aren’t already overextended.
2. How We Grade (Glossary of Terms)
Trend (EMAs): We analyze three timeframes, but grading is based on the Intermediate and Long-Term trends.
Intermediate (10/40d): The Daily baseline.
Long-Term (10/40w): The Weekly EMA configuration. Critical for grading. A “Confirmed Uptrend” requires the 10-week EMA to be above the 40-week EMA.
(Note: The Short-Term 5/20d EMA is used only for immediate context, not grading).
RSR Variance: The difference between an ETF’s intermediate-term relative strength rank and its near-term rank. Positive (+) means the ETF is improving its leadership standing.
CMF (Money Flow): A volume-weighted average of accumulation and distribution. (> +0.10 is Bullish).
RSI (Momentum): We look for the “Optimally Bullish” zone (60-70) for strong trends, or resets from Overbought (>70) levels.
This user guide is limited to helping subscribers interpret the data we share, but investors should understand the risks inherent to trading .Use StockCheatSheets as a starting point for your own research and not a recommendation to buy and sell securities
