Health-care stocks are bouncing.

The S&P 500 health-care sector climbed more than 3% on Tuesday in a strong day for the broader market as investors embraced an improving forecast for the coronavirus outbreak. The moves pulled health-care stocks out of correction territory defined as a 10% drop below a recent peak with the group now just 8% away from its January top.

"You're definitely seeing a wave of support here. J&J got the earnings season off to a good start," Bill Baruch, president and founder of Blue Line Capital, told CNBC's "Trading Nation" on Tuesday.

Johnson & Johnson shares rose nearly 4.5% on Tuesday after the company rose its quarterly dividend and cut its 2020 outlook in its first-quarter earnings report.

To get a better sense of where health-care stocks might be headed, Baruch examined a chart of the Health Care Select Sector SPDR Fund (XLV), which tracks the group.

"You're seeing a very, very good chart setup" as the ETF moves through its 50- and 200-day moving averages, typically a constructive technical sign, Baruch said. "It's really chewed through a pocket of resistance between 90 and 95."

The XLV closed more than 3% higher Tuesday at $97.12.

"There's a few individual names I like, everything from Bristol-Myers to Amgen, but today, I'm going to focus on AbbVie because I think that the fundamentals there are a bit better than some of the others," Baruch said. "You're getting a 6% dividend. You're also avoiding the very high [price-to-earnings multiple]."

The "chart still has some work to do," however, Baruch said. But that's why he liked it.

"You can see a down trend line that it's moving through. There is a trend line that it broke down below previously," he said. "It still faces a 50-day moving average. So all in all, there is a lot of resistance between 81 and 85 in this name, and I think once it gets through there and the broader sector gets through there, this could be a leader to the upside."

AbbVie closed up nearly 4% at $82.13 on Tuesday.

Steve Chiavarone, a portfolio manager, equity strategist and vice president at Federated Hermes, said investors generally should opt for stock-picking rather than passive investing right now.

"You really want to be doing things more selectively with active management," he said. "I think that this crisis has, in a lot of ways, put pressure on weaker business models while also, the economy coming out of this, while we think it can be very strong, it is going to be different. There's going to be winners and losers."

In health care, the winners could be the companies that get us through this pandemic, Chiavarone said.

"There's over 70 vaccines that are under development, so, whichever companies come to the fore first are likely to benefit from that," he said. "More broadly, it's not about a vaccine. It's more about what we're going to do coming out of this crisis, and I think one of the things that we've recognized is that our health-care system was not prepared for this. And so, one of the things we expect that will happen going forward is [to] establish ... strategic reserves for key medical devices and key antiviral drugs, and we expect to see a kind of big buy ahead of that, or a big buying spree in those areas."

That could boost medical-device, pharmaceutical and biotechnology stocks "on a go-forward basis" as demand grows, Chiavarone said.

But picking individual names was still his preferred course of action for buyers.

"We think it really is a stock picker's environment, not just in health care but, quite frankly, across industries. You don't want to own everything right now. You want to be able to choose amongst those companies that are well positioned for the economy going forward and those that may be under some more pressure," Chiavarone said. "So, we would definitely err towards the side of individual stocks."

Baruch largely agreed.

"I think it's going to be a stock picker's game going forward," he said. "This is where you're going to see advisors and individual investors really kind of flourish."

The S&P health-care sector is up over 9.5% in April as of Tuesday's close.

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As health care climbs out of correction, traders suggest investing 'selectively' - CNBC