NEW YORK ( TheStreet) -- President Obama is putting pressure on Congress to finalize health care reform legislation before the end of the year, and this is likely to make the health care and medical sectors even more compelling.The sector has been attractive to investors because of several factors: The elderly population is growing; there has been an increase in diseases and cancer rates; and Americans generally want to live longer and healthier lives. In addition, health care companies have seen continuous year-over-year revenue growth. The proposed reform is expected to further accentuate the sector's appeal by increasing accessibility to prescription drugs and turning tens of millions of previously uninsured people to into health care customers. You'd think that those affiliated with the industry would be smiling from ear to ear, but they're not. Opponents of the legislation are against the idea of a government-run insurance program, and drug makers are upset over the billions of dollars in rebates they will have to fork over to the government over the next decade. Additionally, medical device providers are upset because they will be forced to pay a 2.5% tax to the government on all of their products. At the end of the day though, there is hope for the sector, in particular drug makers and hospitals. Lobbyists for Big Pharma have managed to include an $80 billion rebate agreement in the reform, while also successfully winning a fight that would have required some of its largest players to pay back another $106 billion in additional rebates over 10 years.
As for hospitals, they were able to keep intact a $155 billion deal that enables them to receive payments from Medicare and Medicaid. Three equities expected to remain in an uptrend are: The iShares Dow Jones U.S. Health Care Providers ( IHF), which gives exposure to hospitals. IHF is up 71% from a March low of $26.68 to close at $45.55 on Tuesday. The Vanguard Healthcare ETF ( VHT), which gives broad exposure to the healthcare sector. VHT is up 41% from a March low of $37.58 to close at $52.90 on Tuesday. The iShares Dow Jones U.S. Medical Devices ( IHI), which focuses on the medical device sector. IHI has rebounded from a March low of $31.69 to close at $50.37 on Tuesday, an increase of 59%. When investing in these equities, inherent risks are involved. A good way to mitigate these risks is through the use of an exit strategy. According to the latest data at www.SmartStops.net, an upward trend in the previously mentioned ETFs could come to an end at the following price points: IHF at $42.11; VHT at $51.25; IHI at $48.77. Keep in mind that these price points fluctuate as market conditions change and updated data can be found at www.SmartStops.net. Written By Kevin Grewal in Laguna Niguel, Calif.