The start of July didn't treat memory stocks kindly...
Three of the biggest names in memory cooled off after massive triple-digit gains in the past year.
I'm talking about Micron Technology (MU), Seagate Technology (STX), and Western Digital (WDC).
Even with the pullback, each one of these stocks has more than doubled so far in 2026. And each of them set new 52-week highs toward the end of June.
In fact, in May, I shared that the Power Gauge ("PG") gave Micron a "bullish" rating before it soared more than 200%.
So, it's not surprising that memory stocks were due for a pullback. And at the end of last week, each of these stocks sat well below their recent highs.
In the chart below, you'll see each stock's year-to-date ("YTD") performance through July 2, and how far it sits below its latest peak...
Despite these big pullbacks – the Power Gauge still rates each stock as "bullish" or better.
That's not a mistake, folks.
As we've seen – these stocks are still big winners this year. And no stock goes straight upward forever.
To be clear, I'm not saying to completely avoid memory stocks now...
But it's never a smart idea to put all your money into one group of investments. And while one industry is experiencing a pullback, there are other places where you could be growing your money more.
In fact, the Power Gauge recently detected a "bullish" shift in a very different corner of the market...
The Power Gauge Is Now 'Bullish' on This Sector
Last week, the information-technology sector performed worse than any other sector. As a whole, its basket of stocks dropped about 2% between June 26 and July 2.
That's in stark contrast to the healthcare sector. This group of companies grew 5% over the same period – more than any other sector on the market.
Now, this growth by itself could be a fluke. But as I mentioned, the Power Gauge noticed a "bullish" signal from this sector on July 2.
You see, the healthcare sector is massive... The Power Gauge issues a rating to 1,000-plus stocks in that sector.
Of course, that's too many stocks to discuss in an issue of Chaikin PowerFeed.
Instead, we'll look at the best names through the State Street Health Care Select Sector SPDR Fund (XLV).
This ETF has struggled since late February. It even got a "bearish" rating as recently as mid-May...
But in the past month, the fund's share price popped up 6%. And on July 2, the Power Gauge flipped to "bullish" for the first time since late January.
You'll see this action in the chart below...
Even better – the fund pulled ahead of the S&P 500 Index toward the end of last month. And the "smart money" on Wall Street just started taking an interest in the ETF again.
Finally, notice that the share price is above the top dashed line. Those dashed lines are part of a trend-following indicator known as the "Keltner channel."
I discussed this indicator back in March – so we won't dig into it again.
All you need to know here is that a share price above the top band is a good sign for investors.
Now, this turnaround is still gaining momentum. I wouldn't rush to invest your hard-earned wealth into this ETF.
But of the 59 stocks this ETF holds, 16 of them get "bullish" or better ratings today. Any one of those stocks could be a sound investment in the months ahead.
Good investing,
Ethan Goldman
