By Doug Busch
Pharmaceutical stocks are drawing renewed attention as investors look for areas of the market that can hold up in a more uncertain environment. As volatility increases and growth expectations become less clear, the sector's steady demand, resilient earnings, and less sensitivity to the economic cycle are starting to stand out.
The VanEck Pharmaceutical ETF is up 11% over the past year and down 2% year to date compared with the State Street Healthcare Select Sector SPDR ETF, which is down more than 7% in 2026. The PPH pharma ETF is a bit illiquid, but provides a good visual representation of the sector's outperformance.
Round number theory is coming into play on the weekly chart as the PPH tests an 18-month break above a cup base pivot of $99.61:
The ETF is lower three of the last four weeks and is down 10% from its most recent 52-week high. The ratio chart against the S&P 500 shows it has outperformed. The ETF successfully retested a prior break above a cup with handle pivot of $83.45 from the first week of January 2024. Note that the pattern began with a bearish evening star in April 2022. A doji and spinning top appeared at the depth of the base in September-October 2023. Eli Lilly, the largest holding at almost 20% of assets, is weighing on the ETF's return as it is down 23% from its peak in early January. Lilly's drop is due in part to Novo Nordisk receiving approval for the pill version of its weight loss drug.
With that in mind, it's worth taking a closer look at two attractive pharmaceutical names.
Pfizer is up 9% so far this year as it recovers from a significant drawdown that dates to the Covid era. Pfizer retreated from the $60 level in December 2021 and dropped below $20 last April when it recorded a spinning top candle. Looking at its daily chart over the past year shows first how its secular trend is changing as the 200-day simple moving average started to curl higher in January:
A bullish ascending triangle took shape starting last October, gaining 15% in the first week after a favorable tariff ruling. That week saw the strongest volume in at least five years. Note the bearish candlesticks at the top of the pattern with a spinning top on Oct. 3, a doji on Feb. 13, and an engulfing candle last Friday.
Pfizer has performed well against pharma peers since January, and I admire how much better it is remaining near the $27.50 area this time compared with last October. Enter here and look for the stock to move toward $32.50 in the second half, which represents a 20% gain from current prices. Remain bullish above $24.50. Pfizer was trading around $27 Monday.
GSK, a global diversified pharmaceutical maker, satisfies those looking for international exposure. The stock is up 10% year to date, 39% over the past year, and pays a dividend yield of 3.3%. A 13% haircut from mid February offers a good risk/reward setup here in my opinion. A well received acquisition in January should help its long-term prospects.
The daily chart illustrates how GSK has outshined peers over the past year. Note the possibility of a bullish MACD crossover this week from below the zero line:
The stock has performed well since breaking above the cup-with-handle pivot of $41.63 on Sept. 30. It is now trading roughly between the $50-$60 range, where a bull flag formed during a powerful earnings reaction that rose 7.5% on Feb. 4 (its fourth consecutive positive reaction). But note the breakout failed quickly after a doji candle on Feb. 19, which was a red flag. It then fell five of the next six weeks including an 8% loss the first week of March, which was its largest weekly drop in 16 months. On March 25 the stock completed a bullish island reversal with a 3.3% gap up.
Enter here and look for the stock to travel toward $72 by year end, a 33% gain from current prices. Remain bullish above $51.50. GSK was trading around $54 Monday.
Doug Busch is the senior technical analyst at Barron's Investor Circle . His technical view is added to stock picks, including those published exclusively for Investor Circle readers. A glossary of technical terms is updated regularly with new entries.
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
March 30, 2026 10:44 ET (14:44 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments