Jim Cramer talked about Pfizer Inc. (PFE) at the top of his Mad Money program Tuesday night. "Shares of Pfizer also looked to have a rough day after it reported. But as investors realized the drug maker still has amazing growth and a 3.5% dividend yield, shares climbed 3.1%," Cramer noted. Let's pay a visit to PFE today see if Tuesday's gains can continue.
In this daily bar chart of PFE, below, we can see that the price of PFE is back above the rising 200-day moving average line. Prices are still below the declining 50-day moving average line but that would change with a rally above $43. The daily On-Balance-Volume (OBV) line has been weakening from early December but the line could be in the early stages of a turn higher. In the lower panel is the 12-day price momentum study. This indicator made a higher low from December to January as prices made lower lows. This difference is a bullish divergence and it can foreshadow a rally as it shows that the pace of the decline has slowed.
In this weekly bar chart of PFE, below, we can see that prices have been in an uptrend the past three years. Tests of the rising 40-week moving average line in 2018 were not long sustained and have been buying opportunities with the benefit of hindsight. Prices could close the week above the 40-week line this Friday. The weekly OBV line shows a shallow decline the past couple of months. The weekly MACD oscillator is in a take profits sell mode as it is pointed down towards the zero line.
In this Point and Figure chart of PFE, below, we can see a downside price target of $36.89 being projected but a decline to $39.39 is needed to continue the decline. A rally to $43.51 will improve the chart picture.
Bottom line strategy: PFE may be done with its two-month correction but the uptrend may not resume right away. Prices could trade sideways for a while. The clue to renewed strength will be heavier volume being transacted on days when PFE closes higher.