Wednesday, July 13, 2016

The Country Caller examines what the technical indicators suggest about probable investor behavior today

Valeant Pharmaceuticals Intl Inc. (NYSE:VRX) and Gilead Sciences, Inc (NASDAQ:GILD) are two renowned names in the health care industry. Both the companies have been trying to sustain their dominance so as to grow themselves; the Laval based pharmaceutical company, Valeant has recently been struggling to sustain its position in recent times, as investors have been bearish on the stock. This is why its share prices have slumped more than 5% in the last one month.

The recent developments suggest that one of the biggest investors in the company, Sequoia Fud, has also withdrawn its investments from the company. However, the street is quite optimistic that the share prices will bounce back soon as renowned brokerages such as Rodman & Renshaw are adamant that the stock prices may touch $90 in a period of twelve months. The consensus TP stands at $62.9, offering more than 150% upside.

The California based biopharmaceutical company, Gilead Sciences is up more than 8% since the Brexit news shook the markets. Renowned street houses such as Jefferies Group and Credit Suisse are optimistic about a bright future of the company. The consensus TP stands at $115.50, with more than 30% upside. While positive news exists about both these companies, the Country Caller examines as to what technical indicators reckon about probable investor behavior today.

Valeant Pharmaceuticals currently stands in a neutral position, although a likely action by the bears can plummet stock prices. The 14-day RSI suggests a Neutral position while other indicators suggest that the stock is approaching an oversold region. The recent neutral trend appears to be gaining momentum, while the bulls are still dominant.

Major price level for Valeant Pharmaceutical is $23.7, a break above which might lead to $24.19 and $24.96, respectively. Major support resides at $22.93 level, a break below which may further depress to $22.65 and $21.88 levels, respectively. We thus maintain a Neutral stance on Valeant Sciences.

Gilead Sciences also stands at a Neutral position currently. The 14-day RSI currently stands in a Neutral position, while it is heading toward an overbought region. Other indicators such as oscillators and Stochastic RSI indicate oversold condition, while the current bullish trend appears to be gaining strength.

Major price level for Gilead Sciences is $87.13, a break above which may advance it to $87.64 and $8.47 levels, respectively. Major support resides at $86.30 level, a break below which may further depress to $85.98 and $85.15 levels, respectively. We maintain our bullish stance on Gilead amid the recent developments.

No comments:

Post a Comment