Stocks to Sell: Pfizer (PFE)
Faced with the expiration of patents on blockbuster drugs such as Lipitor, Pfizer (PFE) is desperate to buy its way out of its pipeline problems. That’s why it pursued AstraZeneca (AZN) as an acquisition target. AZN didn’t want any part of the deal, however, and now the technicals don’t look much better than the fundamentals.
Optimism for PFE stock evaporated last month — the market wasn’t too keen on the merger either — and that has it flirting with technical weakness. PFE stock has fallen 7% since April 2, breaking through areas that should lend support.
PFE stock slipped 3% below its 50-day moving average and 200-day moving average. PFE stock is also 10% below its 52-week high. Although PFE stock appears to be climbing back, the technicals say that will be a sucker bet.
Again, there’s no hope that oversold conditions will bring in the buyers. PFE has a relative strength indicator of 45. Furthermore, based on 10 years of performance, June is not friendly to PFE stock. It has an implied downside of 3.1% for the month.
PFE bounces back a bit in July, usually, but not enough to make up for lost ground. It needs more than a percentage point or two to achieve technical strength, making it look like one of our stocks to sell.
As of the writing, Dan Burrows did not hold a position in any of the aforementioned securities.