Regeneron Pharmaceuticals (REGN) soared sharply higher earlier this month and made a "normal" correction as prices pulled back to unwind overbought conditions. REGN is trading higher Wednesday and may be starting a new leg higher. Let's check the charts to see if these gains can be sustained.
In the daily bar chart of REGN, below, we can see that the shares are trading above the rising 50-day moving average line and above the rising 200-day moving average line. The 50-day line is close to crossing above the 200-day line for a bullish golden cross.
The On-Balance-Volume (OBV) line shows gains in September and that is a positive development. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line but has crossed to the downside for a take profit sell signal.
In this weekly Japanese candlestick chart of REGN, below, we see a mixed picture. The shares are trading above the rising 40-week moving average line. The price pattern looks like a large bull flag formation.
The weekly OBV line is pointed lower and suggests that sellers of REGN are more aggressive. The MACD oscillator has moved above the zero line for a fresh buy signal.
In this daily Point and Figure chart of REGN, below, we can see a downside price target in the $651 area. A trade at $720 is needed to refresh the uptrend.
In this weekly Point and Figure chart of REGN, below, we can see an upside price target in the $824 area.
Bottom-line strategy: I am not convinced that REGN can push higher in this current market environment. Strength above $725 is a start but that may not propel REGN above $750.
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