EARN25

Teva Stock Flashes Bearish Signal Once More

TEVA has run up to a trendline with bearish implications in the past

Managing Editor
Oct 17, 2018 at 2:30 PM
facebook X logo linkedin


Drugmaker Teva Pharmaceutical Industries Ltd (NYSE:TEVA) is lower today, down 4.7% to trade at $21.24, amid reports that Express Scripts (ESRX) excluded Teva's migraine drug from coverage. In addition to the drop today, TEVA recently flashed a bearish signal, indicating the slide may be far from over.

Teva stock, for the second time within a month, is within one standard deviation of its 40-day moving average, after a lengthy stretch below this trendline. In the past three years, there have been 11 other signals of this kind, after which Teva shares were down by an average of 4.8% a month later, and positive only 27% of the time, per data from Schaeffer's Senior Quantitative Analyst Rocky White.

Daily Stock Chart TEVA

TEVA's drop today likely snaps a three-day winning streak. Another 4.8% drop in the next month would have the stock breaching the $21 level, which has recently emerged as support the last two months.

There is ample room aboard the bearish bandwagon in the event of a TEVA downturn. Short interest fell by 11% in the most recent reporting period, to 31.8 million shares -- the lowest since July 2017.

The good news for options traders is that TEVA sports a Schaeffer's Volatility Scorecard (SVS) of 93 out of 100, which shows the stock has tended to make larger-than-expected moves on the charts compared to what the options market had priced in. In simpler terms, it may be an opportune time to speculate with Teva options.

 

You Don’t Need 25 Alerts -- You Need ONE You Can Trust!

That’s the idea behind Trade of the Week, Schaeffer’s newest trade alert.

Every Monday morning before the opening bell, you’ll receive a single, expertly researched trade recommendation -- built from the same proprietary research we’ve been using for over four decades.

It’s not just a signal.

It’s a plan designed for traders who are tired of jumping from alert to alert without ever finding their edge.

No juggling alerts. No switching directions mid-week. Just one clear, expertly researched trade idea -- delivered before the market even opens.

👉 JOIN RIGHT NOW FOR JUST $1 TO GET THE NEXT TRADE!