Alexion Pharmaceuticals Does Not Look Boston Strong

Charts of the Boston-based biotech to do not provide a compelling case to buy the stock.
Stocks quotes in this article: ALXN

The Lightning Round is a very popular segment of Jim Cramer's Mad Money program. Callers get the chance to ask Jim about stocks they are interested in. Thursday night one caller asked about Boston-based Alexion Pharmaceuticals Inc. (ALXN) : "This valuation is too high. It's not my favorite," replied Cramer. 

Let's check out the charts of ALXN to see what they can add to the conversation.

In the daily bar chart of ALXN, below, we can see that the prices were in a declining phase from April to September/October. Prices have shown some improvement into November but the pattern of lower highs is still intact. Prices are trading between the slightly rising 50-day moving average line and the slightly declining 200-day moving average line.

The daily On-Balance-Volume (OBV) line has been weak from July and tells us that sellers of ALXN have been more aggressive -- this is not what chart watchers want to see. The 12-day price momentum study shows a small bearish divergence from October to November as momentum weakened slightly. 

 
In the weekly bar chart of ALXN, below, we see a mixed picture with the price action and the indicators. Prices are below the declining 40-week moving average line.
 
The weekly OBV line shows are on the rise the past four months, signaling more aggressive buying while the Moving Average Convergence Divergence (MACD) oscillator has crossed to the upside for a cover shorts buy signal. 
 
 
In this Point and Figure chart of ALXN, below, we can see a potential upside price target of $125 and that a trade at $104.44 could weaken this chart. 
 
 
 
Bottom-line strategy: These three charts of ALXN do not yet provide a compelling case to go long.
 
Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Employees of TheStreet are prohibited from trading individual securities.

TAGS: Investing | Stocks | Technical Analysis | Pharmaceuticals | Mad Money

More from Stocks

Put Some Manpower to Work

Paul Price

As the markets start picking up, let's look at how to play MAN.

The Skinny on Navigating a Rotational Bear Market

James "Rev Shark" DePorre

Don't be too concerned about the indexes; instead, watch individual stocks and sectors and track new lows and breadth to identify where opportunity lies.

Sentiment Is Careening Toward Limbo Land

Helene Meisler

If we rally much more, here's where I see the bears going. Also, let's unpack whether we're oversold, or overbought.

Market Mistrust May Make for a Move Higher

James "Rev Shark" DePorre

This lack of faith in the market could help put more pressure on the upside, here's how.

When the Markets Are a Game of Risk, Keep This Fund in Your Quiver

Mark Abssy

This ETF manages risk in a nuanced way.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight