Eoin Treacy's view Healthcare is a very broad theme encompassing everything from residential care and insurance to reliable dividend payers and cutting edge innovation. The healthcare, energy and technology sectors share an ability to introduce efficiencies and new practises which can radically improve how we live our lives. More than most, these sectors have the ability to literally create value and are therefore worth monitoring for their potential to represent the 'next big thing'.

On March 5th 2010, I clicked through the constituents of the Nasdaq-100 looking for shares which were completing long-term bases. I did not know it at the time but exposure to cloud computing was a theme common to almost all of the technology results. At the time a number of pharmaceuticals were also moving to a position of outperformance but the crowd appeared to be focusing more on technology.

In yesterday's piece focusing on shares hitting new highs, two healthcare stocks particularly attracted my attention. Biogen completed a very lengthy base within the last year and Bristol Myers Squibb appears to be in the process of doing the same. Base formation completion is a sufficiently rare occurrence that it prompted me to attempt to ascertain whether there are other healthcare shares completing lengthy bases.

To do this I used the Chart Library High/Low Filter to scan the constituents of NYSE, AMEX and the Nasdaq Composite for shares that hit at least new 3-month highs or lows in the last five days. There were 1294 results. I next used Bloomberg to identify sectors and subsectors for these shares. The various segments of the Healthcare sector were well represented in the list. The presence of many food and restaurant as well as apparel companies was also noteworthy. I will concentrate on these in a subsequent review. I next isolated 114 healthcare related shares that have made at least new 3-month highs in the last five days. By excluding insurance, REITS and hospital shares from my review, the number was decreased further. I put these shares into a section of my Favourites and used the 'View All Charts' function to quickly scan through the charts on a 20-year basis.

The Biotech segment has a number of companies which remain in impressively consistent uptrends. In this review I will concentrate on those completing long-term bases. Cubist Pharmaceuticals ranged mostly between $17 and $27 from late 2005 until March when it broke upwards. It found support in the region of the 200-day MA in early August and broke upwards again last week. A sustained move below $30 would now be required to begin to question medium-term scope for additional upside. Immunogen also appears to be in the process of completing a first step above its almost decade long base. Nymox Pharmaceuticals (market cap $300 million) has a similar pattern.

ArQute, and Curis (markets caps of around $300 million) all remain within their respective bases but have exhibited progressions of higher reaction lows for the last couple of years. At a minimum this suggests demand is returning to dominance at incrementally higher levels. Micromet is somewhat larger but also remains in its base. It rallied this week to break the progression of lower rally highs. Sustained moves up out of their lengthy congestion areas will be required to indicate a return to medium-term demand dominance.

In the pharmaceuticals sector, OPKO Health shares a similar pattern with Bristol-Myer Squibb. It has posted a progression of higher reaction lows since early 2009 and is now testing the 2007 peak. Vivus has held a progression of higher reaction lows since early 2009 and has returned to test the $10 area. A sustained move above that level would confirm the return of demand dominance. Alkermes and ViroPharma share a similar pattern. Pharmacyclics appears to be in the process of completing a first step above its base.

In the medical devices sector, Spectranetics ($268 million market cap) recently found support in the region of $5 and a sustained move below it would be required to question current scope for additional upside. AngioDynamics ($400 million market cap) is rallying towards the upper side of its almost four-year base. Thoratec tested the upper side of its base in January and remains in a relatively consistent medium-term uptrend.

On this cursory examination, there are a significant number of companies which appear to be in the process of completing lengthy bases. In this piece I did not discuss the sector's leaders, a number of which are hitting new all time highs. Healthcare is going through an evolution. New treatments, technology and practices promise to enhance our lives. The investment crowd appears to be getting behind an increasingly large number of companies offering exposure to this broad theme.