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Valeant (VRX) Retreating; 13 Will be a Key Level

Last week, we noted that VRX had a rough resistance and might resume its prevailing long-term downtrend. The market is expecting an earnings report on 8/8, and thus pared some of gains VRX saw from May through July.

VRX Daily Chart

(click to enlarge)

13 is Key:
- As noted in the previous update, 13 is key because there is a confluence of support factors there.
- Because of these support factors, a break below 13 would open up a bearish continuation, and would put the 2017-low of 8.31 in sight with risk of falling further.
- A hold above 13.00 would support the prospect of a price bottom to develop.
- If price for example holds above 13 and pushes up to 18, price action since Nov 2016 would look like an inverted head and shoulders and futher suggest the price bottom scenario.