Alexion (ALXN) - Get Report shares surged Thurday after reporting earnings, ending the day up 8% to $131. The biotech company's stock started rising with a powerful breakout gap that lifted shares over 3%. They only went higher from there.
This impressive surge is leaving behind a very solid support zone. Investors should take a much more positive view of shares in the near term.
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Back in early June ALXN suffered an extremely damaging breakdown on negative news regarding its Soliris drug. Three weeks later shares had lost over 25% before finding support near the $112 area.
Since then the stock has been attempting to build a base while consolidating in a narrow range. This month the range tightened further as earnings neared. Following today's news inspired rally a major bottom appears to be taking shape.
ALXN's ramp has taken out a major overhead trendline that links the August and September highs. The next challenge for the stock will be its declining 200-day moving average near $136. The stock has not tested this key long-term indicator since early January of this year.
Once this area is convincingly cleared, ALXN has plenty of room to run. As this plays out investors should consider the stock a buy on weakness. Solid support is now in place from the $130 to $126 area.
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.
