We last covered Regeneron Pharmaceuticals (REGN) on June 22 when we concluded that, "A rally back over the highs of April would be needed to turn this chart from bearish to bullish." Well here we are, with REGN breaking over the June highs and now the April high close.
In this daily chart of REGN, above, we can see that prices fell a little bit more after our June 22 update. Prices have rallied smartly since late June and have pushed above the June highs and the highest close made in April. This gives pretty much everyone who bought REGN in the past six months a gain.
Prices are now above the rising 50-day simple moving average line. The daily On-Balance-Volume (OBV) line has been moving up since late June, showing that buyers of REGN have been more aggressive, with more volume being traded on days when REGN has closed higher. The price action and the momentum study are not diverging, which is a plus. The declining 200-day moving average line intersects just below $440 and could soon be challenged.
This three-year weekly chart of REGN, above, is coming along nicely. Prices are below the declining 40-week moving average line, but it could be tested soon. The weekly OBV line has bottomed out with the price action. The lower lows in February and June are not matched with lower momentum readings, but rather higher readings. This difference between weaker prices and stronger momentum is a bullish divergence and tends to foreshadow stronger prices.
In the lower panel is the Moving Average Convergence Divergence (MACD) oscillator has generated a cover shorts buy signal below the zero line. These bullish signals on REGN could mean we see a rally to the $500 area in the weeks and months ahead. Investors should risk below $380 for now.