TEV trade ideas
$TEVA in Buy Zone + Daily and Weekly TD 9'sI've been watching $TEVA for awhile now and finally it is hitting my first buy target.
Both the Daily and Weekly are showing a TD 9, however the daily did break the TD resistance line.
Furthermore, the RSI, CMF, moving averages, stoch, and current bearish candle all point to $TEVA moving lower.
I'm going to enter half of my position size in now and wait for a green 1 over a green 2 for the rest of it.
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Teva is in a range... Follow the price.TEVA is oversold on the daily RSI and has been consolidating there for a few days. I believe that a close on the daily and weekly above the $16.60 area should break us higher. Money is flowing into the April $18 calls. That is where my money is at this moment.
Watch the consolidation zone per my chart and keep watch on a weekly or daily close below $16. 50's area. It could try and complete a H&S.
Teva Is In A Range... Follow The PriceTEVA is oversold on the daily RSI. However, TEVA could complete a H&S pattern if it closes the weekly and daily below $16.60 (below the trend line). If it breaks higher, you should see a close both on the daily and weekly above the $16.60 area.
If it spikes based on market sentiment you could see $18 by April.
THE WEEK AHEAD: TEVA, BIDU, RIG, XOPBIDU (44/42), RIG (33/56), and TEVA (49/53) announce earnings this week, with TEVA looking for a March to April volatility contraction of about 15%, BIDU, approximately 7.7%, and RIG, 6.9%. Instead of looking to play these pre-announcement for a volatility contraction (the contraction percentages aren't that compelling), I'll look to potentially short put/acquire/cover instead,* particularly since all of these underlyings have been hammered of late and are at the low end of their 52-week ranges.
Pictured here is a Plain Jane, TEVA 20-ish delta 16 short put in the April expiry; it's paying .51 with a break even of 15.49. The more aggressive 30 would be at the 17 strike and is currently paying .79 with a 16.21 break even. On margin, the 16 short ties up about 320 to put on, the 17, 340, with respective returns on capital of 16% and 23% at max. The break evens represent a 15% discount over current price for the 16 short put; an 11% discount for the 17.
The BIDU April 18th 155 (25 delta) is paying a 4.55 credit with a break even of 150.45, a potential 14.7% return on capital at max and a 11.4% discount over current price if assigned. As with TEVA, there is little point in holding shares if you don't have to, since it does not pay a divvy. If you end up in-the-money, roll as is and proceed to sell calls against to reduce cost basis.
If you're not into tying up 31.00 in buying power on Baidu, there is RIG. Unfortunately, due to its size, you're going to have to go closer to the money to make it worthwhile in dollar and cents terms: the April 15th 8 short put (40 delta) is paying .57 with a break even of 7.43 -- a 35.6% potential return on capital at max and a 10.3% discount over current price if assigned.
On the exchange-traded fund front, not much is hopping from a premium selling standpoint with VIX dropping into the 15's from its 2018 year-end highs of 36+, so I'll be looking to hand sit and keep powder dry for a higher volatility environment to get into nondirectional setups in broad market instruments. That being said, I will continue to sell premium in XOP, where the 30-day implied is over twice that of the broader market (34.1% versus SPY 15%).
* -- The natural alternative should you not be interested in acquiring shares would be to roll the short put out in time "as is" if it hasn't worked out and then proceed to cover with a short call. The last two dividends were a paltry .07, so I could see not wanting to tie up buying power to be in the shares unless you absolutely have to.
Long $TEVA Pharmaceutical StockTEVA develops, manufactures and sells generic medicine in a range of forms including tablets, capsules, injectables, inhalants, liquids, ointments and creams. They also create specific speciality medicines that assist the Central Nervous System and Respiratory medicines focused on asthma and chronic obstructive pulmonary disease. One of their primary drugs is Copaxone.. used to treat multiple sclerosis however we are seeing more and more generic competition come into the marketplace.
Teva Investor FAQ: ir.tevapharm.com
See past analysis for more insight on what happened when it was publically disclosed that Warren Buffet increased his stake to owning 4.25% of the entire companies stock.
Pros:
Cheap/Mid Range Stock Price
Wealthy Investment Firms Are Positioned
Longstanding Global Brand
Cons
Pharma Sector Competition
No more dividends paid to holders as of this time
At risk of further bearish movement if the stock market falls due to overvaluation on major indexes
Trading can contain substantial risk and is not suited for every investor. An investor could potentially lose all or more than their initial investment. "Risk capital" - is money that can be lost without jeopardizing ones financial security or life style. Only "risk capital" should be used for trading and only those with sufficient risk capital should consider trading. I am not a licensed financial advisor nor do I give out financial advice. You assumes full risk and responsibility for their trading activity. Past performance is not indicative of future results. Individual results will vary due to a variety of market and timing conditions.
TEVA on the 4-HrI am long TEVA and feel we are a bit over-extended on price action North and hoping for a pullback to $17.80 or lower to get more (If not, oh well). I have a $21.00 price target (3-weeks) timeframe. Let's see if there is some profit taking to bring the price action down to the level mentioned.
This analysis speaks for itself -- the chart display's a V-Bottom on the 4-Hr and the stock has taken a beating. Warren Buffet took a position in this company just before it fell, so I will follow the money!
Good Luck,
Biff