Walgreen Co. (NYSE:WAG) — This is the largest revenue producer among the U.S. retail drug chains. But ever since it ended its relationship with Express Scripts in 2011, it has been in a decline.
Sales leverage has been running behind other drug chains, and the company will likely experience very low sales growth in the future. Earnings for fiscal year 2012 are estimated at $2.76, down from $2.94 in 2011.
Technically WAG appeared to be consolidating within a rectangle until it broke through its 50-day moving average and support line in May.
The recent rally could take the stock back to its 50-day at $33 where it should be sold since the current pattern is that of a bearish horn — one of the most feared technical patterns.
A penetration through the lower support line at about $29 targets the stock for a fall to $22.