Market Overview

AstraZeneca Shares Are Looking Very Weak Right Now

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It's only April, but AstraZeneca plc (ADR) (NYSE: AZN) has already had several pieces of good news from their drug pipeline. 

In January the FDA approved the breast cancer drug Lynparza, which the company was collaborating with Merck Inc (NYSE: MRK) on. In February, its Neurofibromatosis drug Selumetinib was granted an Orphan Drug Designation by the FDA, which provides tax incentives for companies that are developing treatments for rare diseases. 

Days later the FDA also approved a lung cancer drug, Imfinz, and in March the company announced a type 2 diabetes drug had met its primary and secondary endpoints. 

Typically, this bevy of good news would lead to immediate upside in stock price, but that has not been the case for AZN in 2018. As of this writing the stock was flat for the year, and according to VantagePoint, a predictive analytics software, it actually looks like downside is imminent.

This first chart shows AZN's performance over the last month. Note a couple of things: 

The blue line (in this case, a moving average prediction for three days in advance), has clearly converged with the black line, a simple 10-day moving average. When the actual moving average is higher than the predicted, that's a bearish signal. 

The Neural Index—the red-green bar at the bottom of the chart—has shifted to red. That indicates near-term weakness.

The gray candle, which is a predicted candle for the next day's price range (in this case Friday), is lower.

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This chart shows pretty much the same thing, but the blue line is predicting the moving average two days out, instead of three. Note how the two lines have already crossed over. This tell us we can more than likely expect downside at least through Tuesday's trading.  

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Same thing on this chart, but the blue line represents one day out. On a daily basis, AZN has looked weak for about a week. 

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All of this tells us to be cautious of AZN in the coming days for potential downside. 

Vantagepoint is a content partner of Benzinga

Posted-In: vantagepointBiotech Short Ideas Technicals Markets Movers Trading Ideas General

 

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