America's favorite drug dealer, Pfizer (PFE), has been steadily declining since the start of the year.
The stock is down 24% for 2023 while the indexes are positive. This represents significant underperformance as shown by the steadily declining relative strength line at the top of the chart.
PFE now trades below declining 21, 50, and 200-day moving averages which is extremely bearish. If the general market flushes lower, this one is going to really fall apart.
The decline in Pfizer stock has been a long time coming. The global pandemic that took and ruined millions of lives has been a profit windfall for the company.
The effectiveness of these vaccines is fiercely debated. But their profitability is undeniable.
But COVID won't be here forever. And the company's record sales growth has come to a screeching halt.
The key level I am watching is $41. This was the last line of support in 2022 and is quickly turning into resistance for PFE stock.
It also coincides with the 21-day moving average which is likely to contain any short-term bounce higher.
Consider taking a short position in PFE in the $40-$41 range. I don't think one needs to risk more than about 4% on the trade. A buy stop at $43 should be adequate if the downtrend is to continue.
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