Given the weakness in the overall stock market, Regeneron (REGN - Get Report) stock could be doing worse on Tuesday after reporting earnings. Still, a 6% decline down to $323.33 surely isn't giving much inspiration to the bulls, particularly with shares dropping below a key technical support level.
It's worth pointing out that other names are moving on earnings too. Notably, Allergan (AGN - Get Report) stock was down 4.5% after its quarterly results, while GW Pharma (GWPH) gains 3.3% on its earnings report.
Regeneron's first-quarter earnings of $4.45 per share missed estimates by more than $1, while revenue missed the mark as well. Sales of $1.71 billion came up short of consensus expectations by $50 million, despite growing 13.2% year over year. The company's earnings for the fiscal first-quarter also were down from a year earlier.
In that light, the selling is no surprise. Particularly as the rest of the year won't get much easier. Analysts had been looking for essentially flat earnings growth for 2019, while revenue is expected to grow 10% for the year - below the rate that Regeneron grew first-quarter sales.
Why does this matter? Because it's giving investors less reason to load up on the stock and we're seeing that play out in the charts now.
Trading Regeneron Stock
In 2016 and 2017, we can see that $340 was support for Regeneron stock, while this level acted as resistance in the first half of 2018. When that happened, shares of Regeneron ultimately bottomed near $290, a level we could revisit sooner rather than later.
That's because $340 -- which had again turned into support in the second half of 2018 -- is giving way right now. Regeneron stock had been flirting with a breakdown of this level over the past few weeks, as seen on the weekly chart above. Tuesday's move lower clearly puts REGN stock below this key level, as well as below all of its fourth-quarter and 2019 lows.
The $320 level could provide some reprieve to REGN longs, but should the pressure continue $290 to $300 certainly looks to be in the cards. Given that shares aren't oversold, Regeneron stock could easily stay under pressure, particularly if the broader markets remain under pressure.
Watch $320. If it gives way, $300 or lower is possible.
On the upside, watch $340. If Regeneron stock rallies but can't push above this mark, then this former support level could act as resistance going forward. That would be a bearish development and give "trapped" bulls a chance to unload their position. Above $340 is more bullish.