With the Correction In Pfizer Behind Us, Traders Can Go Long Again

 | Feb 14, 2018 | 2:45 PM EST
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Pfizer Inc. (PFE) suffered through a decline with the broad market this month but it now looks poised to resume its uptrend. Let's see what barriers may need to be passed before it heads its way higher.

In this daily bar chart of PFE, below, we can see how prices have finally climbed back above the 200-day moving average line. Chart resistance around $36.50 and the now declining 50-day moving average line are the first hurdles PFE needs to overcome. The volume in the past few weeks has been heavier than usual and that can be a signal aggressive selling has been countered by aggressive buying.

What does that mean? Simply, the selling has been absorbed without pushing prices significantly lower.

The On-Balance-Volume (OBV) line has quickly responded to the upside suggesting that buyers are being aggressive again. The Moving Average Convergence Divergence (MACD) oscillator is narrowing and could soon give us a cover shorts buy signal.

In this weekly bar chart of PFE, below, we can see that prices are back above the rising 40-week moving average line. The weekly OBV line only saw a small dip in the past week and the MACD oscillator gave a take profits sell signal.

In this Point and Figure chart of PFE, below, we can see that prices held conveniently at $33.26 -- a level that was resistance back in March and April and into July. A trade up at $35.66 will be a small upside breakout and could help the chart gain is vigor again.

Bottom line: PFE looks like it can rally further. Aggressive traders could probe the long side at current levels risking a close below $33.50. More cautious traders could go long on a close above $36.50.

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