Bulls: Reach for These Drugs to Ease Your Mood
- Posted by Greg Harmon
- on February 20th, 2013
I made the mistake of calling today’s 1.25% sell off in the S&P 500 a smackdown earlier on twitter. I was comparing it to the move in Treasuries which was a lot more muted but nonetheless, it really was not a smackdown. Although, it probably felt like it to many with half of it coming after 2:30 and nothing like it happening recently. If you are one of these people then I offer you a sedative, or upper, or viagra, whatever you want. These drug stocks are still poised to breakout.
Bristol Meyers Squibb, $BMY
Bristol Meyers Squibb, $BMY, has been consolidating in a bull flag since mid January. It has now worked off a technically overbought condition on the Relative Strength Index (RSI) and negative Moving Average Convergence Divergence histogram (MACD) has stalled. A move over 37 triggers a breakout with a target of 39.50. Of course a breakout can happen either way so watch the downside as well, for a move under 36 for a retrace to 34.20.
Celgene, $CELG, gave it a go at a break out early today and then got sucked back into consolidation. It still has a strong set up for either direction though. The MACD is improving and the RSI is bullish, so lets focus on the upside. A move over 102 is the trigger. If you are skittish after today’s pullback after the trigger, just give it a little more room, say to 102.50. If it loses support at 96 then you can become bearish with your sights on the gap at 87.50 or more.
Pfizer, $PFE, is testing resistance at 27.80 after a pullback to 26.80. The Measured Move higher takes it through the resistance to 28.40 on the next leg up. The bullish RSI and MACD about to cross to positive support a continued move higher.
So do you feel better yet?
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Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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