Mylan (MYL) has traded sideways since September with lows around $40 holding in February and May, but with lower highs at $55, then $54, $50 and recently $47. On the face of that, it sounds like a weakening pattern, but let's look closer.
In this daily chart of MYL, above, we can see prices are above the 50-day moving average line and recently tested the underside of the 200-day average. The movement of the On-Balance-Volume (OBV) line tells a compelling bullish story. The OBV line bottomed in August through October. There is a strong improvement in the OBV line in November and December followed by a sideways trend. The OBV goes sideways even while prices for MYL decline. Then the OBV line turned up again in May and June and hit new highs this month. The price action may not be the strongest, but the OBV line is foreshadowing an upside breakout with the aggressive buying that has been going on since early May.
In this weekly chart of MYL, above, we can see prices are poised to test the 40-week moving average line and maybe close above it. The OBV line has been constructive in recent weeks, indicating more bulls. There is a bullish divergence between the equal lows around $40 on MYL in October and now, but much higher lows from the momentum indicator. A close over $47 on MYL should get the bull going for a potential rally to $55, the December high.