Mylan (MYL) peaked in the beginning of 2015 and every bounce since has failed at a lower high. It looks like investors have changed their opinion on this drug maker long before the current flap about the pricing of one of its products.
In this daily chart of MYL, above, we can see prices made lower highs but there was a short-lived move to the upside in August. Prices rallied above the 200-day moving average line and the April highs but the EpiPen pricing issue quickly ended that rally. Prices are below the declining 50-day and 200-day averages. The volume of trading has been heavier in August and September and the On-Balance-Volume (OBV) line has been trending lower, suggesting sellers have been more aggressive, with the volume of shares traded being heavier on down days. Momentum is not (yet) diverging from the price action.
In this four-year weekly chart of MYL, above, we can see prices are below the declining 40-week moving average line. We can also see the all-too-brief rally above the average line. The OBV line on this time frame is mostly neutral -- moving sideways as prices have moved sideways. The Moving Average Convergence Divergence (MACD) oscillator has been in negative or bearish territory for the past year and recently generated a fresh sell signal. Dips under $40 on MYL have been bought but that price action itself is not enough to suggest prices have bottomed.
A close below $38 will keep the bear in control and probably lead to further losses. On the upside, a rally above the resistance in the $48-$50 area is needed to break the string of rally failures.