Leaders Of The Pharmaceutical Pack

• Posted by Greg Harmon
• on April 15th, 2014

When it comes to the large cap pharma/biotech companies Allergan, $AGN, and Merck, $MRK, may be the canaries in the coal mine. The tell. The leaders of the pack, when it comes to signals of a market sector reversal. Allergan, is not a small company at $38 billion market cap. It is starting to turn the ship around and head higher. The weekly chart below shows the shows the Marubozu candle building this week confirming the Hammer reversal from last week higher. This comes after a retracement of only 23.6% of that major move higher from June 2013, but 61.8% of the last leg in that run from the February 3rd low. The RSI has started to move back higher and you

can measure a positive RSI Reversal to at least 137.36. The MACD is leveling after a brief pullback and staring to kink up. A cross higher confirms the others. When you look at Celgene $CELG, Biogen IDEC, $BIIB, Bristol-Myers Squibb, $BMY, and $PFE they are not nearly as far along in reversing. But one other to watch is Merck, $MRK. The weekly chart on this shows a very shallow ‘V’ recovery and only a thin resistance zone from 57 to 57.70 above before heading for new highs. Keep an eye on these new leaders of the pack. Allergan reports May 7th and Merck April 29th.

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