Teva Pharmaceutical Industries Ltd. (TEVA) is down sharply Monday.
Media reports of alleged price fixing by generic drug firms are being cited. The stock has broken down to new lows. Is there support in sight?
Let's check the charts and indicators for some guidance.
In the daily bar chart of TEVA, below, we can see that prices have been under selling pressure for most of the past twelve months. Some chart support developed in December around the $15-$14 area and again in April. Prices gapped lower Monday. TEVA has been trading below the declining 50-day moving average line for months and below the declining 200-day line since December.
The daily On-Balance-Volume (OBV) line has been in a similar year-long decline and tells me that sellers of TEVA have been more aggressive for months.
The trend-following Moving Average Convergence Divergence (MACD) oscillator has been below the zero line for much of the last year.
In the weekly bar chart of TEVA, below, we can see weakness for the past three years. A low in late 2017 is being retested Monday. Prices are below the declining 40-week moving average line.
The weekly OBV line is bearish, and I find no bullish divergence from the 12-week momentum study to anticipate a reversal. Not good.
In this point and figure chart of TEVA, below, we do not have any price gaps and no volume. A downside price target around $9 is being projected, but prices do not have to stop there.
Bottom-line strategy: Prices peaked in 2015 and there is no bottom in sight. Do not try to pick a bottom on this stock. Remember that a bottom is a process and not a point in time. It will likely take a lot of time for TEVA to bottom.