AstraZeneca is posting bearish reversal signals
Remy Gaussens July 30, 2020 9:51 AM
The failure to confirm the upside breakout of former 2020 top area at 9200 is a significant sign of weakness
AstraZeneca, which produces pharmaceutical and medical products, posted 1H results: "Total Revenue increased by 12% (14% at CER) to 12,629 million dollars in the half, with growth across all three therapy areas and in every region. (...) Reported EPS of 1.17 dollars in the half, representing an increase of 108% (106% at CER). Core EPS increased by 24% (26% at CER) to 2.01 dollars. (...) An unchanged first interim dividend of 0.90 dollar per share." The company confirmed 2020 guidance.
From a chartist point of view, the failure to confirm the upside breakout of former 2020 top area at 9200 is a significant sign of weakness. In addition, the stock is posting a Dark Cloud Cover: a bearish reversal candlestick pattern while at the same time the weekly RSI is posting a bearish divergence: both are strong signals likely to favour a downturn. As a consequence, traders might consider short position below 50% retracement of the decline since the top (invalidation level of the candlestick pattern) at 9300 to target a decline towards June bottom area at 8100 and even January top at 7800. Alternatively, an upside breakout of 9300 would lower the immediate corrective risk and favour another test of the 10k area.
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.