Biogen Inc. (BIIB) stock has suffered a number of sinking spells over the years. The latest decline started in early June when prices briefly reached the $460 area. Six months later and prices have been cut in half. Is this enough punishment? Would farsighted investors be interested at this price level?
Let's check the charts and indicators.
In the daily bar chart of BIIB, below, we can see that the shares are trading below the declining 50-day moving average line as well as the declining 200-day line. The trading volume looks like it has increased since the middle of October. Heavier volume in a price decline can sometimes mask accumulation. The On-Balance-Volume (OBV) line shows a decline the past six months but so far the early December low has not been broken.
The 12-day price momentum study in the lower panel shows a low in September and a higher low in early December. When compared to the price action of lower lows, the momentum study presents us with a bullish divergence and tells us that the pace of the decline is slowing -- this can be a sign of scale-down buying by farsighted investors.