Pfizer (PFE) is another name that's showing relative strength right now. Shares of Pfizer made a bottom back on Aug. 8 but didn't retest it on Oct. 3 when the market made a new low, which indicated that buyers were still in control of this stock when the S&P was teetering. Since August, Pfizer has been locked in an uptrending channel, bouncing between the dashed trend line support and resistance lines in the chart above. Now shares are testing a double breakout.
It's a double breakout because not only is Pfizer testing a push through its dashed trend line resistance level, the stock is also breaking out above it's previous horizontal resistance level at $20.20. The key to whether this stock is tradable now becomes confirmation -- yesterday's breakout is still too small to be considered statistically significant.
Confirmation in this stock comes on an open above $20.20 that pushes through yesterday's highs. When that condition is met, it's a safe bet that the excess of supply of Pfizer shares above that level has been absorbed by buyers. Afterwards, I'd recommend keeping a protective stop just below $20.If this breakout isn't confirmed, Pfizer is likely to make its way back down to trend line support. Pfizer, one of the highest-yielding drug stocks, shows up on a list of 10 Top Stock Picks From Morgan Stanley.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV