We reviewed the charts of Bausch Health (BHC) on Dec. 15 and wrote that "The CEO believes that splitting up the company will unlock value, but unfortunately traders and investors do not agree at this point in time. Continue to avoid the long side."
BHC is due to report their latest earning's figures on Wednesday before the market opens. Let's review the charts again.
In this updated daily bar chart of BHC, below, we can see that prices have been on defense the past 12 months. BHC is trading below the declining 50-day moving average line as well as the declining 200-day line. Trading volume has been heavier than average the past five weeks which could be some shift in ownership from weaker hands to stronger hands. The On-Balance-Volume (OBV) line shows weakness from late December. The Moving Average Convergence Divergence (MACD) oscillator has been below the zero-line for much of the past year.
In this weekly Japanese candlestick chart of BHC, below, we see a mixed picture. The two most recent candles show us upper shadows which tell us that traders are rejecting the highs. We also see a lower shadow in January below $24, which shows some rejection of the lows. The OBV line has been steady the past three months. The MACD oscillator is bearish, but has narrowed enough to make a crossover and cover shorts buy signal fairly easy.
In this daily Point and Figure chart of BHC, below, we can see a downside price target of $20.
In this second Point and Figure chart of BHC, below, we used weekly price data and can see a potential downside price target in the $17 area.
Bottom line strategy: I have no special knowledge of what BHC is going to report to analysts and shareholders but the charts and indicators are not yet constructive. Continue to avoid the long side.
