Rather than cover the outlook for the broader market – which you can see here on Friday’s BNN appearance — I’d like to cover speculative stock idea. I referenced Valeant in a recent Investors Digest article, and in this blog
While certainly not a stock for the meek, this stock has some interesting technicals behind it at this moment
I’ll refer to the daily chart on this stock today. Here are some basic observations:
- $120 neckline from what appears to be a reversal pattern is being tested. Its not broken yet—but a break would be very bullish. Keep your eyes open for this potential.
- Downtrend line formed over the stocks crash is broken, 50 day MA is broken to the upside – it’s being challenged as I write.
- Moneyflow (top and bottom panes) is improving on the short termed chart
- Comparative relative strength is improving again on this short termed chart
- On the short termed negative: momentum is short termed overbought across the board (stochastics RSI and MACD).
In a nutshell: this stock looks like it will pull back a bit due to its overbought momentum. However, the stock exhibits many of the key elements one would want to see for at least a short termed move. Valeant is not without its fundamental issues, though – so the stock is not for the faint of heart. For an aggressive component of your portfolio, the stock may be suitable if / as / when that $120 neckline is broken.
I will post my special yearly “rant” blog on or before Wednesday. This year’s entry promises to raise a few eyebrows. Next week I will return to my regular blog format, as usual.