There has been quite a painful pullback in shares of Vectura over the past few sessions. This has been coming back in the usual pattern (for this stock) from a bull trap through the 200 day moving average at 98p.
At the same time we can see the shares approach the 50 day line just below the current market price circa 81p. What is been interesting in the past is the way that the shares tend to make new lows after failing above the 200 day line. The question now is whether history will repeat itself?
The main help now for bulls of the stock is that we see an alleged revival in jaded takeover talk from current levels in order to snap the pattern that we have seen in place on the daily chart since the beginning of last year.
The other possible plus point on the fundamental basis (one which may be preferred to the bid talk) over the near term other would be that there is positive news regarding the generic drugs manufacture issue.
This hurt both Vectura and Hikma earlier in the year in terms of the generic version of Advair release. The volatility in Vectura may be more related to hopes and fears regarding this than anything else. Indeed, one would imagine if there was a takeover here it would only come in AFTER this generic issue is cleared up – “mid-2018” at the earliest.
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