Don't Ignore This Chart

Here's A Pharma Printing A Hammer After Filling Gap

I'm constantly looking for short-term trading opportunities and Perrigo (PRGO) fits the bill.  After reporting better-than-expected results in its latest quarter, PRGO gapped up strongly and today filled its gap before finishing on a solid note to print a hammer (blue circle below) - many times a signal of a bottom after a downtrend.  Reported revenues of $1.23 billion easily exceeded expectations of $1.17 billion.  In addition, EPS of $1.39 blasted past the $1.10 consensus estimate.  Now the issue is whether PRGO can overcome a very weak pharma group ($DJUSPR) to bounce from gap support:

The early September breakout occurred on heavy volume and that now represents the best price support near 79.  Gap support is closer to 81 so that support range of 79-81 needs to hold.  The recent high after earnings is a solid target at 91.  The reward to risk opportunity here grows as PRGO moves closer to its support range.

Happy trading!



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