Don't Ignore This Chart

Here's A Pharma Printing A Hammer After Filling Gap

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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!

Tom

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Tom Bowley
About the author: co-founded Invested Central and served as the site's Chief Market Strategist for more than 10 years. His unique trading style combines both his fundamental and technical strategies to systematically manage risk while trading. A regular contributor to StockCharts.com's bi-weekly ChartWatchers newsletter since 2006, Tom's role at StockCharts has expanded significantly since he joined the company as a full-time Senior Technical Analyst in March of 2015. Learn More
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