Regeneron Pharmaceuticals (REGN) has traded lower and lower for months. A bullish divergence since February could be the start of a light at the end of the tunnel. Prices could improve a bit but a sustained advance will likely need a period of base building. Let's visit with the charts and indicators.
In this daily bar chart of REGN, below, we can see that prices have been in a downtrend since last June. REGN has been below the declining 50-day moving average line for much of the time. The slower-to-react 200-day line has had a negative slope the past four months. The daily On-Balance-Volume (OBV) line has also been weak and just made a new low for the move down. So why be sounding positive? One reason is the volume pattern shows heavier volume at the late November low, the February low and the recent new low. The OBV line did not make a new low in February and only made a slight new low this month. This isn't an uptrend of course but it could mean that prices are getting "sold out." In the lower panel in the 12-day price momentum study which shows a bullish divergence with a higher momentum low from February to May even though prices made lower lows.
In this weekly bar chart of REGN going back four years, below, we can see a large top reversal pattern. Prices are below the declining 40-week moving average line. REGN is retesting a possible support zone from 2014. The pace of the decline in the weekly OBV line is slowing and the weekly Moving Average Convergence Divergence (MACD) oscillator is getting close to a bullish crossover and cover shorts buy signal.
In this Point and Figure chart of REGN, below, we can see that REGN has met a long-term downside price target of $282. Can prices still go lower? Yes, but it won't take too much of a rally to test or break the downtrend.
Bottom line: We don't have enough technical evidence to recommend a long position but traders should cover shorts and wait for more price information before probing the long side.