Healthcare continues to be a weight as the biotechs have been losing ground for weeks now. The IBB is on pace for a sixth consecutive decline and is now off 19% from recent all time highs where it reversed right at the round 400 figure on 7/20. This week alone so far up until this writing it is off by 9% and if it stands at the close today it would be the largest drop since the week ending 8/5/11 where it sunk more than 13%. Its 200 day SMA was taken out on 8/20 and the last time it was undercut prior to that was during a 7 week losing streak ending between weeks ending 2/28-4/11/14. Lets take a past and present look at a pharma play we profiled in our Friday 9/11 Game Plan. Below is exactly how it was discussed in our report.
Stocks to be considered shorting opportunities are VRX. VRX is a best of breed name in the group higher by 59% YTD and 89% over the last one year period. The sector has been showing some signs of weakness, but management must be given credit for synergistic acquisitions and 4 straight positive reactions to earnings up 6.2, 4.2, 14.7 and 3.8% on 7/23, 4/29, 2/23 and 10/20. The stock is lower 4 of the last 5 weeks as it forms a bearish head and shoulders pattern. Interesting to note on the very volatile session on 8/24 VRX found precise bids right off the round 200 number. Look to enter with a sell stop below the round 220 handle at 219.50.