Pharmaceutical stocks represents a defensive asset when a positive market cycle is about to finish or when it is foreseen a cycle less positive than the previous one. In such context pharma stocks should have an advantage because of inelastic demand for such goods.
Novartis ($NVS,$NOVN) is one of the candidate to break up as the price is moving in a triangle...
Novartis has corrected about 7% towards and below its 200day moving average, and is coming back. A close above 78.35 today, would confirm that. Momentum indicators were a little oversold and are bouncing.
Stop at 77.50
Target zone: 82.80 - 84.00
The price got out of its ranging bound. The lagging span broke the Kijun and had just bounced on the range rectangle before. We may expect the price to lateralize a bit before the earnings and then, if they are positive, to see an uptrend that would make it reach the higher part of the cloud. A retracement after benefits are taken would provide a good entry point...
