Don't Ignore This Chart!

Here's A Pharma Printing A Hammer After Filling Gap

 | 

I'm constantly looking for short-term trading opportunities and Perrigo (PRGO) fits the bill.  After reporting better-than-expected results in its latest quarter, PRGO gapped up strongly and today filled its gap before finishing on a solid note to print a hammer (blue circle below) - many times a signal of a bottom after a downtrend.  Reported revenues of $1.23 billion easily exceeded expectations of $1.17 billion.  In addition, EPS of $1.39 blasted past the $1.10 consensus estimate.  Now the issue is whether PRGO can overcome a very weak pharma group ($DJUSPR) to bounce from gap support:

The early September breakout occurred on heavy volume and that now represents the best price support near 79.  Gap support is closer to 81 so that support range of 79-81 needs to hold.  The recent high after earnings is a solid target at 91.  The reward to risk opportunity here grows as PRGO moves closer to its support range.

Happy trading!

Tom

Tom Bowley
About the author: is the Chief Market Strategist at EarningsBeats.com, where he provides stock market education, guidance, and trading strategies using a unique combination of technical, fundamental, and historical analysis. Tom provides EarningsBeats.com members with four portfolios (Model, Aggressive, Income, and Value), all designed to beat the benchmark S&P 500, and a revolving Watch List of hundreds of companies reporting strong quarterly earnings (must beat both revenue and EPS estimates) and exhibiting technical strength as well. These companies comprise EarningsBeats' annotated Strong Earnings ChartList (SECL), from which Tom trades exclusively. Tom writes a Daily Market Report (DMR) for members to include an executive summary, market outlook, sector/industry watch, and trading ideas. Learn More
Subscribe to Don't Ignore This Chart! to be notified whenever a new post is added to this blog!
comments powered by Disqus