Pfizer shares seem to be done with their recent climb, as price formed a head and shoulders reversal pattern on the daily chart. This can also be considered a triple top, which is still a valid reversal signal, and the neckline is around $1995/share.
A few false breakdowns were already made, which means that the downside momentum wasn’t sustained. For now, RSI is indicating deeply oversold conditions, suggesting that another bounce off the neckline support might take place. Stochastic, on the other hand, is climbing but is close to indicating overbought conditions.
The short-term 100 SMA is still above the long-term 200 SMA, which means that the path of least resistance is to the upside. Strong buying pressure could lead to a move up to the resistance around $2300/share and perhaps an upside breakout. On the other hand, a downside break below the $1995/share level could mean a longer-term downtrend.
Pfizer Shares Outlook
News reports that the company is coming close to securing a large deal is keeping Pfizer shares supported for the time being. Apart from that, drugs currently in the pipeline such as cancer drug Ibrance could promise more gains for Pfizer shares.
At the American Society of Clinical Oncology’s annual meeting just a few weeks ago, Pfizer unveiled data from its PALOMA-3 study which looked at using Ibrance as a treatment for hormone receptor-positive/HER2- advanced breast cancer patients who had not undergone prior endocrine-based therapy. The results were equally impressive, with the study being stopped early by the independent data monitoring committee because of efficacy. The company is planning on patenting this product sometime this year.
In addition, there have been rumors swirling that the company is gearing up for a large overseas acquisition or a spinoff of certain assets in the company. There are no details disclosed just yet but any news regarding these could mean gains for the stock.
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