Regeneron Pharmaceuticals (REGN) is poised to retest its all-time highs and maybe set new records in the weeks ahead. When we reviewed the charts and indicators for REGN in late March we were looking for an upside breakout, and it finally started at the end of April and the beginning of May.
Our strategy was good -- "In this Point and Figure chart of REGN we can see a print at $400 will be a double-top breakout and could give up a potential upside price target of $452. Further strength above $452 will be very bullish longer term."
Prices climbed a $100 above our $452 target and corrected in the past two months. Another upside move looks like it could get underway soon. Let's check the charts and indicators.
In this daily bar chart of REGN, below, we can see that prices recently closed above the 50-day moving average line. The pattern over the past three months looks like a consolidation pattern that can support further gains. The slower-to-react 200-day moving average line is rising telling us that the longer-term trend is positive. The daily On-Balance-Volume (OBV) line has been steady the past three months even when prices declined twice. A steady or neutral OBV line when prices are weak tells us that traders and investors stayed with their long positions. The daily Moving Average Convergence Divergence (MACD) oscillator turned up from below the zero line in August for a cover shorts buy signal and it is close to crossing above the zero line for an outright go long signal.
In this weekly bar chart of REGN, below, we can see that prices are above the rising 40-week moving average line. There is chart support around $460 and the $520-$540 area is nearby resistance. The weekly OBV line has been rising since November and supports the bull case for REGN. The weekly MACD oscillator is in a take profits mode but could soon cross to the upside again for a new outright go long signal.
In this Point and Figure chart of REGN, below, we can see the consolidation pattern and an upside price target of $549 or back up to the highs.
Bottom line -- risking below $460, trade REGN from the long side looking for a rally back to the June high and maybe beyond.