In his "No Huddle Offense" segment of Mad Money Wednesday night, Jim Cramer told his viewers that there is a stealth bull market afoot and it's easy to miss. You might think Wednesday's rally in Pfizer (PFE) is just about COVID booster shots, but you'd be wrong.
There's a multi-year bull market happening in the drug stocks, Cramer explained, and it's affecting a lot more than just Pfizer. It looks a lot like the drug stock rally of the 1990s, Cramer concluded, and you don't want to miss it.
Let's look at PFE today but not ignore names such AS Johnson & Johnson (JNJ) , Bristol-Myers Squibb (BMY) , Eli Lilly (LLY) , and Regeneron (REGN) .
In the daily bar chart of PFE, below, we can see that the shares took flight in July. PFE soared quickly from late June but a longer-term rally started in early March. The shares are trading above the rising 50-day moving average line and above the bullish 200-day moving average line.
The On-Balance-Volume (OBV) line has been strong and its movements have mirrored the price action. The Moving Average Convergence Divergence (MACD) oscillator is in a bullish alignment above the zero line.
In the weekly Japanese candlestick chart of PFE, below, we can see the last four years of price history. Prices made an upside breakout over $42 or $44. The level we choose for the breakout is not all that important but the size of the base is important. The bigger the base pattern the bigger the subsequent rally. The shares are trading above the rising 40-week moving average line.
The weekly OBV line is bullish and so is the MACD oscillator.
In this daily Point and Figure chart of PFE, below, we can see a $54 price target, which is not all that far away.
In this weekly Point and Figure chart of PFE, below, we used a five-box reversal filter. Here the software is projecting a price target in the $104 area.
Bottom-line strategy: We looked at the charts of PFE on July 28 and gave targets of $61 and $94. Today we offer $54 in addition to $61. Longer-term the $94 to $104 area is a target.
(Bristol-Myers is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells BMY? Learn more now.)
