"I was fiddling with the filter. I asked for the Asia index and sectors, changed the rankings around a little bit and noticed this one near the top of most of the periods.

"Then I pulled up the chart and it sang to me a consistent song. Reminded me of gold, only better.

"It's the Thai economy health services. How do I go the next step and find what instruments are mimicking this index, and how would I determine a close proxy for my U.S. markets?

"I think I like the filter, I just want to make sure I set it up right and learn how to apply it correctly.

"P.S. it's trending, it's consistent, it is making higher highs and higher lows, and I forgot to apply the 200 m.a. but I would think it not too extended. My guess is the size decision is again exceedingly important."

Eoin Treacy's view Thank you for highlighting this interesting sector and for your valuable contribution to last week's Chart Seminar. Healthcare is a multi faceted discipline, with many of its sectors in bull markets.

I posted a review of US healthcare companies, mostly biotech, completing long-term bases in Comment of the Day on October 28th. These could be deemed to be the cutting edge of healthcare research. The outperformance of a number of Asian healthcare sectors is more to do with two separate themes. The first is the demand for high quality healthcare among the burgeoning middle classes. The second is the growing medical tourism market. (Also see Comment of the Day on September 28th).

The Thai Heath Care Index, as you point out, has a large number of consistency characteristics. One of its chief aspects is that it is a temporal as well as relative strength leader. The Index bottomed in 2008, broke out of its base in April 2009, hit a new all time high late last year and remains in a consistent uptrend. Healthcare has been among the best performing Thai sectors. The recent pullback is the largest in almost three years and is an inconsistency relative to its previous history. The large downward from peak was a warning shot. Since then it has held the progression of rising reaction lows, remains above the 200-day MA and bounced back emphatically. The medium-term upside can continue to be given the benefit of the doubt in the absence of a sustained move below 1300.

If we look at commonality across Asia, the Singapore Health Care Index broke out of a yearlong range to hit new highs less than three weeks ago and the Bombay Healthcare Index has exhibited relative strength compared to its domestic market. The Chinese Healthcare sector was among the first to take out its pre-crisis peak but has pulled back to test the 2008 highs over the last year. It will need to break the progression of lower rally highs to indicate a return to medium-term demand dominance. Other Asian healthcare sectors do not share the commonality of those in Thailand, Singapore and India. These three countries are popular medical tourism destinations.

This spreadsheet of the constituents of the Thai, Singapore, Chinese and Indian healthcare sectors highlights the differing focus of the industry in each country. Thailand's healthcare sector is made up entirely of hospitals. Bangkok Dusit Medical Services is by far the largest constituent and exhibits a similar pattern to the Index. It also has a US listing under the ticker BDULF and appears to be reasonably liquid.

I also looked at US healthcare sectors. The S&P 500 Health Care Distributors Index is noteworthy because it is among the S&P's best performers. It has been consolidating above the 2007 peak for the last year and rebounded impressively from the October lows. It retested its highs last week and a sustained move below 315 would be required to question medium-term scope for additional upside. McKesson Corp and AmerisourceBergen have similar patterns.