The health care sector has led the market decline over the past few days, but that’s nothing new. It’s been the worst performer so far in 2016, and it looks like it will continue to move still lower in the coming weeks. The weakness in the sector is pervasive, hitting all subgroups, but drug stocks seem to be technically poised for a serious decline. #-ad_banner-#I’ve noticed a pattern in some of the biggest drug stocks, specifically Pfizer (NYSE: PFE) and Merck (NYSE: MRK), where they trade near their 52-week highs in a tight range or rectangle pattern, break out on… Read More
The health care sector has led the market decline over the past few days, but that’s nothing new. It’s been the worst performer so far in 2016, and it looks like it will continue to move still lower in the coming weeks. The weakness in the sector is pervasive, hitting all subgroups, but drug stocks seem to be technically poised for a serious decline. #-ad_banner-#I’ve noticed a pattern in some of the biggest drug stocks, specifically Pfizer (NYSE: PFE) and Merck (NYSE: MRK), where they trade near their 52-week highs in a tight range or rectangle pattern, break out on news and then fail badly. Pfizer did this in July and has been falling ever since. Merck, on the other hand, broke out and failed just this week, so the jury is still out on that one. A lesser-known drug stock is currently exhibiting the same pattern as Pfizer and Merck, which could result in a nice profit for short sellers. Zoetis (NYSE: ZTS), which focuses on drugs and vaccines for pets and livestock, was actually spun off from Pfizer in 2013, so there’s not a lot of history for chartists to ponder. But the short-term pattern of range, breakout… Read More