Pfizer (PFE - Get Report) 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.