Actavis (NYSE: ) — This was one of our Top Stocks to Buy for April, when I said, this “producer of generic and branded drugs, is the result of an acquisition of the Actavis Group by Watson Pharmaceuticals, which adopted its name. The combined company beat analysts’ earnings estimates for Q4 by 4%. This year, a full integration of the two companies is expected to bring in earnings of $7.70 to $8.10 per share.”
The trading target of $100 was revised to $110 on April 3, due to a court decision that allowed the company to release its asthma drug in the United States and Europe.
On Tuesday, Piper Jaffray’s pharma analyst raised his price target to $160 from $128 and the stock popped to $133 on Wednesday. At Friday’s close, at over $127, it is 23% above its 50-day moving average and 29% above its 200-day moving average.
In an unstable market, stocks at extended ranges usually become highly volatile. Thus, investors should either take profits or engage in protective strategies, like options writing or the purchase of put options, which would limit losses but enable them to participate in further gains.