Drug Stock Due for Another Climb on the Charts

Teva stock has pulled back to a historically bullish trendline

Deputy Editor
Jun 15, 2020 at 2:28 PM
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The shares of Teva Pharmaceutical Industries (NYSE:TEVA) have had a lackluster June, dropping 9.4% for the month so far. Despite the stock's summer struggles, there's a silver lining; this pullback has brought TEVA within a historically bullish trendline that indicates the skid may be short-lived.

According to data from Schaeffer's Senior Quantitative Analyst Rocky White, TEVA has pulled back to within one standard deviation of its 80-day moving average. Within the past three years, two similar signals have occurred, after which the equity enjoyed an average 21-day gain of 4.48%. At last check, Teva stock was up 2% to trade at $11.48, on track to snap a four-day losing streak. The equity is up 16.8% in 2020, but remains a ways off its Feb. 12 annual high of $13.76.

TEVA June 15

Despite the stock's modest gains in 2020, analysts are hesitant on TEVA. Only five out of 19 sport a "buy" or better rating, while the 12-month consensus price target of $11.53 is a chip-shot away from current levels. Should TEVA snap out of its current slump, a round of overdue upgrades and/or price-target hikes could keep the wind at the equity's back.

With that being said, options could be a prudent play when weighing TEVA's next move. The stock's Schaeffer's Volatility Index (SVI) of 58% stands higher than just 8% of all other readings in its annual range, implying that options players are pricing in relatively low volatility expectations at the moment. 

 

 

 

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