Valeant Pharmaceuticals Intl Inc (NYSE:VRX) has been trading very well over the last couple of months, rallying more than 100% from its 52-week low on April 24. Recent volume tells me that buyers are stepping into VRX stock, but I’m not willing to go near it.

Let’s talk a bit about why.

The biggest issue I have with Valeant is the huge amount of debt the company carries on its balance sheet. At last check, it was just more than $28 billion for a company with a market capitalization of just $6 billion!

As VRX stock has climbed, there is speculation that management will begin to settle some of their debt issues by offering current bond holders equity in lieu of bonds. They could also retire some of the debt and borrow at a lower rate. However, this depends on how investors view the future of the company and how the stock is performing.

Then there are the technicals.

As I mentioned, Valeant’s stock has more than doubled since late April but it remains 94% from its 2015 all-time high. So while there is clearly plenty of upside on the chart, any near-term rally may be halted by an important resistance level at $17.50 (the black line). The shares climbed as high as $17.44 on Monday and Tuesday before pulling back below $17.

Coinciding with that failure to breakout is a relative strength index (RSI, at the bottom of the chart) that recently peaked at 90. It’s starting to roll over now, which is yet another bearish technical signal.

The one thing that VRX stock does have going for it is volume. Since the rally began in April, volume has been extremely bullish with huge amounts of buyers coming in on the up days (circled).

If Valeant is able to break above $17.50 in the next week or so, I could change my outlook on the stock. For now, though, I’m sitting in the bearish camp as the odds are higher that VRX will fail and continue its longer-term downtrend.