Pfizer Runs Into Some Resistance

Joel Elconin is the co-host of Benzinga's #PreMarket Prep, a daily trading idea radio show.

Pfizer Inc. PFE shares were trading higher by $0.70 at $32.77 in Thursday's session. Earlier in the session, investors applauded the company's move to acquire Hospria, Inc. HSP for $17b or $90.00/share. A huge premium to its closing price from Wednesday at $64.80.

This stands in stark contrast to what happens to most acquirers that pay a huge premium for an acquisition. On many occasions, the buyer will decline as the Street tries to determine when the deal will be accretive to earnings or whether or the funds could have put to better use.

After a very uncharacteristic over $1.00 higher opening for Pfizer ($33.04 vs. $32.07), it rallied to $33.20 before reversing course. It should be noted that level corresponds with its two highs from January 27 ($33.35) and January 28 ($33.14).

Since reaching that elevated level, investors began to capture the windfall in profits from this normally slow-moving stock. At this time, it has found intraday support at $32.60 and rebounded back to $32.79.