While the health care sector has been a chronic underperformer in recent years, our process is showing that a number of stocks in this struggling sector are exhibiting real signs of strength. With an encouraging earnings report this week, followed by an impressive breakout above resistance, Boston Scientific Corp. (BSX) may be setting up for significant gains beyond current levels. The daily chart shows how BSX is setting up with a classic “big base breakout” pattern, where a multi-month consolidation pattern is finally exited with a significant upside move. As legendary technical analyst Alan Shaw used to say, “The bigger the base, the higher in space!” So after six months of sideways price action, including a test of the 200-day moving average at the April low, BSX appears to be completing a bullish rotation above resistance around $106.50. In terms of upside price targets after a breakout of this magnitude, a common technique is to take the height of the consolidation pattern and project that range to the upside. Given the range of around $20 for this pattern, that would imply a minimum upside objective around $126, representing about a 17% gain from current levels. To further validate this breakout scenario, we can analyze volume indicators to determine whether there is enough buying power represented in the charts. Here we’re showing Boston Scientific along with three volume indicators. First, we have the raw daily volume readings, shown just below the daily price bars. Then we are showing the Accumulation/Distribution Line, which represents the trend in volume over time. Finally, we’ve included the Chaikin Money Flow, which uses daily price and volume movements to measure periods of accumulation and distribution. We can see that Wednesday’s rally after the earnings release was marked by about double the normal volume. This shows that significant demand was seen for Boston Scientific as investors literally bought into the bullish case for future earnings growth. The Accumulation/Distribution Line has been trending higher for most of the last 12 months, and the Chaikin Money Flow remains firmly above the zero level. These two technical indicators suggest that BSX is in a period of accumulation, suggesting a bullish outlook with further upside potential. The weekly chart shows that the consolidation from the last six months has indeed represented a brief pause within a multiyear rally phase for Boston Scientific. Since a key breakout above resistance in early 2023, BSX has remained in a consistent uptrend phase with improving relative strength. Two major pullbacks during the uptrend phase, in October 2023 and March 2025, saw this health care name find support at an ascending 40-week moving average. So while BSX has underperformed the S & P 500 in recent months, the long-term trend remains on solid footing. Many investors have been ignoring the health sector in 2025, given the chronic underperformance and questionable technical configurations. But charts like BSX provide an important reminder that even the most chart-challenged sectors can often include stocks that stand out with bullish setups. -David Keller, CMT marketmisbehavior.com DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
