Chart Of The Day: Pfizer Bull-Bear Struggle Could Continue Till After Q4 Report
Investing.com | Feb 07, 2022 15:25
Pharmaceuticals giant Pfizer (NYSE:PFE), co-developer with BioNTech (NASDAQ:BNTX) of one of the most widely used COVID-19 vaccines in the developed world, is scheduled to release its Q4 2021 results on Tuesday, Feb. 8, before the opening bell.
Consensus estimates are forecasting EPS of $0.8742 on revenue of $24.16 billion. That's more than double the year-ago results for both metrics.
Analysts at Goldman Sachs remain neutral on the New York City-based pharma giant ahead of the company's 2022 guidance. They've set a 12-month price target of $57 for the stock, which closed Friday at $53. Goldman's forecast represents a 7.5% upside.
While expectations for earnings from other, newer drugs like Paxlovid, Pfizer's still-new anti-COVID pill which received emergency use authorization in the US at the end of December, are unclear, there is a consensus that the company is well-positioned to benefit from the ongoing need for its COVID-related vaccine.
Though PFE fundamentals look bullish, technical signals regarding supply and demand are less clear.
Demand fizzled on Jan. 21, at which point the price fell below its most recent uptrend line since the October 2021 low. A four-day rally followed but bulls could still not muster enough oomph to counter bearish activity in order to push the stock back above the trendline.
This failure looks like it's forming the right shoulder of an H&S top.
The reversal pattern's placement is telling. It's developing at the top of a rising channel.
The structure's head is above the rising channel, suggesting traders were collectively prepared to bid up prices at a faster clip. However, the return into the channel increases the odds of the price retesting the channel's bottom.
This bull-bear struggle is what causes this price pattern. A downside breakout of the neckline will likely push the price toward the channel bottom, with its recent rising trend since the March low.
Conversely, if the price blows out the H&S reversal pattern, it would undoubtedly propel prices higher.
h2 Trading Strategies/h2Conservative traders should wait for a trend resolution, as described above.
Moderate traders would short if the price retests the Jan. 28, $54.67 high.
Aggressive traders could short now according to a coherent trading plan. Here is an example:
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Trade Sample
- Entry: $53
- Stop-Loss $55
- Risk: $2
- Target: $47
- Reward: $6
- Risk-Reward Ratio: 1:3
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