Mylan (MYL) has been in a downtrend since a peak in early 2015. The drugmaker has been cut in two but we are not yet seeing much technical evidence that this price reduction has attracted new buyers. Let's look closer.
In this one-year chart, above, we can see MYL is below the declining 50-day and 200-day moving average lines. During the decline from mid-August, the On-Balance-Volume (OBV) line has dropped significantly. The OBV line declines when the volume of trading is heavier on days when MYL declines. This steady decline in the OBV line tells me liquidation of longs has been the order of the day since August. As prices made lower lows in September through early November, the momentum indicator made higher lows. This is a bullish divergence and can sometimes foreshadow a reversal to the upside, but so far it has not materialized.
We used a weekly chart on MYL going back to 2012, above, to show the extent of the decline. MYL is below the declining 40-week moving average line. The weekly OBV line is surprisingly neutral, the Moving Average Convergence Divergence (MACD) oscillator is in a negative configuration, but the two lines of the oscillator could cross for a cover-shorts buy signal.
Bottom line: MYL could bounce a bit before resuming its downtrend, but it is likely to take an extended period of base building before MYL can mount a sustained rally.