Alexion Pharmaceuticals (ALXN) was downgraded by TheStreet.com's quantitative service today so naturally I took a look at the charts and indicators to see how the technical approach worked with the quantitative approach. ALXN made a high at the beginning of September and has weakened since. A close below the cresting 50-day moving average line at the end of October accelerated the move to the downside.
Let's review the daily and weekly charts to see if there is more downside risk for ALXN.
In this daily bar chart of ALXN, below, we can see that ALXN is below both the declining 50-day line and the bearish 200-day moving average line. The daily On-Balance-Volume (OBV) line topped in October and has turned lower telling us that selling pressure has become more aggressive. The trend-following Moving Average Convergence Divergence (MACD) oscillator turned down below the zero line at the end of October for an outright sell signal. The price action the past two or three weeks looks like a bearish continuation pattern so further declines would be anticipated.
In this weekly bar chart of ALXN, below, we can see that prices are below the 40-week moving average line and the slope of this average is rolling over to the downside. The weekly OBV line is pointed down and the MACD oscillator just crossed to the downside for a take profits sell signal.
In this Point and Figure chart of ALXN, below, we can see that prices are not likely to find support until the $104 area and below.
Bottom line -- a quantitative downgrade and a weak technical picture suggest that ALXN is likely to remain on the defensive.