As expected, the pharma area has been one of the strongest areas of the stock market for 2019, and as the biotechnology behind these firms feels like it is advancing 5 years every year, one would expect this to continue to be the case for quite some time.
The stock of the moment comes in the form of Alexion Pharma which yesterday unveiled a consensus beating Q2 update, and raised guidance for 2019. To add to the excitement though, we have Spanish publication Intereconomia suggesting that Roche and Amgen are the two favoured contenders to takeover Alexion over the next few months, in a deal that involves Bank of America- Merrill Lynch.
The good thing about this situation, as is very often in the best stock setups, is the way that with the fundamentals of the alleged target company set fair – earnings per share up by over a quarter, even with an extended wait or no deal at all, Alexion represents a company which is unlikely to disappoint the bulls.
Looking at the charting situation, we see the shares sandwiched between a January uptrend line at $116 and the 50 day moving average at just under $124. The expectation would be for a break above the 50 day line next – with cautious traders waiting for this feature to be broken before targeting a retest of April $140 peaks.