Mylan N.V. (MYL) has been testing and flirting with key support around $40 since September, but it now that it looks like that support level has given way -- what lies ahead?
In this daily chart of MYL, above, we can see how the stock behaved at the end of September and in October and again in February. At each point/date, prices were able to rally from the $40 area. But this past Friday's close below $40 may have been different.
Notice how the On-Balance-Volume (OBV) line behaved -- first with a markup in November but then a sideways-to-easier tone. There is no bullish divergence between the lower lows in prices in April and into May and the momentum study in lower panel. Prices for MYL are below the declining 50-day and 200-day moving averages.
This weekly chart of MYL, above, reinforces the bear case instead of refuting it. Prices are below the declining 40-week moving average line after gapping below it early in 2015. The OBV line on this weekly time frame has been weakening all year, and the Moving Average Convergence Divergence (MACD) oscillator remains below the zero line in a bearish configuration.
The next chart support below $40 on this weekly chart of MYL is down at $30. It would take a rally and close back above $46 to alter the current bearish cast to the charts.