Healthcare companies have putt-putted along all year long and it's time to take a closer look. Healthcare companies (represented here by The S&P Healthcare Index) have gone up 7% while the S&P 500 has increased by 5% in the past 12 months. The index made an attempted divergence from the market in March and April of this year but that failed.

Fundamentally, the group does have favorable trends such as increasing drug prices, consumption trends that are looking better and better, and the aging U.S. population. However, the emergence of more generic drugs has put downward pressure on many mainstream drugs such as Claritin.

There are many conflicting signals in this chart. We always like to enter into stocks that are in strong, long-term trends. HCX has been in a nice upward trend since last October but recently has fallen considerably. The fall below the 200 day line shown in green) was big-time bearish for the stock, but the bounce starting last week and a half  may soon retest that line. We are also paying close attention to the stochastic readings. If you look at the ADX (shown in black) you can see it making a cross under the DM- line early today, which we would consider a bearish crossover. We'd like to see that trend continue at least a couple days along with bearish confirmation in order to make a bearish call.

Our call is simple

• if the 200-day line proves to be an area of resistance and the stochastics fall below 20, we will look to the ADX as well and likely become bearish
• If the index breaks through the 200 day line on the other hand and the stochastics go above 80, we will be bullish.

So at this point, our call is simply neutral on healthcare. Let's have a look at some major players in health care:

Glaxosmithkline

Abbott Laboraties

Price Headley is the founder and chief analyst of BigTrends.com.