Last week, shares of Valeant (VRX) fell to a new low of 13.85. the prevailing trend has been bearish - everything looks bearish. But we did get a bounce back to close the week at 18.00.
VRX 4H chart 11/14
(click to enlarge)
Bearish signs persist:
- Aside from the new low, we can also see that price is trading under the 200-, 100-, and 50-period simple moving averages (SMAs) in the 4H chart.
- Furthermore, the RSI held under 60 after dipping below 30. This shows maintenance of the prevailing bearish momentum.
Rebound vs. resistance:
- As price rebounds, sellers will likely look for resistance first around 18-18.50.
- 18.00-18.50 represents a couple of key support pivots that could turn into resistance.
- The next resistance is likely just above 20.00 up to about 21.20.
- Here price will be challenged against be previous support pivots that might turn into resistance as well as a falling trendline.
- A break above 22.00 might indicate the start of a significant period of consolidation.
- Otherwise, the if price turns back around to the downside around 20.00, bears would be very much in charge.
Here's an article regarding Q3 results:
Why Valeant's Third Quarter Was Not So Bad