Short term Elliott Wave View in XLV (Healthcare EtF) suggests the rally from March 5, 2021 low is unfolding as a 5 waves impulse Elliott Wave structure. Up from March 5 low, wave 1 ended at 115.79 and pullback in wave 2 ended at 113.35. The ETF extended higher again in wave 3 which ended at 125.19. Pullback in wave 4 ended at 121.38 as the 1 hour chart below shows. Internal of wave 4 unfolded as a zigzag Elliott Wave structure. Wave ((a)) ended at 123.03, wave ((b)) ended at 124.10 and wave ((c)) ended at 121.38
The ETF has rallied and broken above wave 3 high at 125.19, suggesting wave 5 has started. Up from wave 4 low, wave (i) ended at 123.39 and pullback in wave (ii) ended at 122.52. The ETF extended higher again in wave (iii) towards 123.86. Pullback in wave (iv) ended at 122.95, and wave (v) of ((i)) ended at 123.88. The ETF then corrects cycle from May 13, 2021 low in larger degree 3, 7, or 11 swing in wave ((ii)) which ended at 121.59. Up from there, wave (i) ended at 125.66, and pullback in wave (ii) is in progress to correct cycle from May 19 low in 3, 7, or 11 swing before the rally resumes.
Near term, as far as pivot at 121.38 low stays intact, expect wave (ii) dips to find support in 3, 7, or 11 swing for more upside. The next extreme area in 3 swing comes at 123 – 123.8 as highlighted in blue box on the chart. The blue box area should find buyers for more upside or 3 waves reaction higher at least.
