Pfizer: Momentum Continues to Build

Published on Tuesday, 01 May 2012 17:02 Written by David Becker

New York, May 1^st (TradersHuddle.com) – Pfizer Inc (NYSE: PFE) reported earnings prior to the opening bell on Tuesday.  The company reported adjusted earnings of $0.58 per share down from $0.60 per share in the prior quarter. Analysts had expected earnings of $0.56 per share for the quarter. Revenues declined 7 percent to $15.41 billion from $16.50 billion. Analysts expected revenues of $15.47 billion for the quarter. 

The stock price action has experienced a smooth upward trend during 2012 climbing approximately 15% during the first 4 months of the year.  The trend has been relatively easy for bulls to rise has the largest pullback during the period has been less than 5%.  After earnings the stock moved lower, but was able to hold support near the 20-day moving average after ISM reported better than expected manufacturing data.  Target support below the 20-day moving average is $22 dollars per share which coincides with the 50-day moving average.  Resistance on the stock is seen near the recent highs near $24.00.  Last week the stock hit a new 52-week high, as investors continue to be attracted to PFE's strong dividends.

Momentum on the stock continues to build.  The MACD (moving average convergence divergence index) created a buy signal in late April where the spread (the 12-day moving average minus the 26-day moving average) crossed above the 9-day moving average of the spread.  The MACD index moved from negative to positive and is now near .10, which equals the highs of the index during the past 6 months.

The RSI (relative strength index) is printing 65 which in the upper end of the neutral zone.  The RSI has remained in the upper half of the neutral range during most of the past 4 months only breaching the overbought region once.  Look for a close above $24 to confirm and upside breakout.