Valeant Tumbles After Breaching Major Support Level

Valeant Pharmaceuticals Intl Inc VRX shares are trading lower by $0.55 at $12.51 in Monday's session.

Before the open, the company announced it will be using the proceeds from its sale of skincare products division to pay down some of its senior secured term loans. It's attempting to refinance or amend additional portions of its outstanding debt.

On the surface, that appears to be good news, but the issue isn't reacting in that manner.

Instead, Valeant's stock is trading well into the $12.00 handle after ending Friday's session at $13.06. The reason for that being on Friday, the issue violated a major support level at $13.00, when it traded at $12.90. Since December, the issue has made several lows in the lower $13.00 handle and managed nice rebounds.

However, the breach of the major support level for the second day in a row has inflicted too much technical damage for it to recover. It has continued to make new lows for the session, with the current one standing at $12.39. That low coincides with its December 2009 low of $12.45.