Shares of BioMarin Pharmaceuticals Inc. (BMRN) are down to an area where it could re-base in the weeks and months ahead. We're watching.
The price of BMRN has been cut by more than half since July (see chart above). The On-Balance-Volume (OBV) line is edging down and the slopes, both the 50-day and 200-day moving averages, are pointed down. The Moving Average Convergence Divergence (MACD) oscillator is following the trend and is bearish. Wait.
This longer-term chart of BMRN, above, has both bearish and potentially bullish components. Yes, prices are in a downtrend and below the declining 40-week moving average. Yes, the OBV line is weakening, telling chartists that sellers are more aggressive. We shouldn't fight the trend, but there is a bullish divergence since October between the lower lows in price and equal lows on the momentum study in the lower panel.
With prices down to a key support zone/consolidation area of $80 to $60, we would anticipate that prices could hold and begin the process of re-basing. BMRN will have to prove itself and set a pattern with a higher low and higher highs. Meanwhile, bears should consider going into hibernation as the downside looks limited from here.