Generic drug manufacturer Mylan N.V. (MYL) is the Stock of the Day at Real Money on Monday as Pfizer (PFE) is in talks to merge its off-patent drug operation with Mylan. Let's see if this is reflected in the price action. MYL was up about 14% in pre-market activity.
In this daily bar chart of MYL, below, we can see that prices have been cut in half the past year but there is some improvement from late May. MYL recently closed above the declining 50-day moving average line. The slower-to-react 200-day line is still well above the market in the $26 area.
The On-Balance-Volume (OBV) line made a low in June and it looks like it will make a higher low in July. A move by the OBV line to surpass its early July peak will be bullish as it will signal a shift by investors from being aggressive sellers to aggressive buyers.
The Moving Average Convergence Divergence (MACD) oscillator is just below the zero line and should quickly cross back above it for an outright buy signal.
In this weekly bar chart of MYL, below, we can see that prices have struggled the past three years. MYL is below the declining 40-week moving average line.
The weekly OBV line is bearish and the MACD oscillator is poised to generate a cover shorts buy signal.
In this Point and Figure chart of MYL, below, we can see the price action through Friday. A downside price target around $17 is indicated. A trade at $19.82 should turn this chart bullish and the software should then generate a bullish price target.
Bottom line strategy: MYL is probably going to have a strong day today but we do not have a broad base formation to anticipate the start of a sustained uptrend.