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TEVA: The Time Has Come

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By Dmitriy Gurkovskiy, Chief Analyst at RoboMarkets

The bull market has made it harder to earn good profits on the share prices of industry leaders. Prices are already high, and the correction may begin at any moment. Day by day, the rumors about crisis spread , and such a crisis is usually expected in the Fall, which is confirmed with the latest 20-year history. Case in point: the dotcom crisis started in early September 2000, with the market reaching its bottom only two years later.

Another fall started in mid Sep 2007, and turned into the global crisis in Aug 2008. Still, the market reached its lowest low and started recovering sooner, in 2009. At the same time, some players are still living the past and waiting for the market to collapse everyday, without noticing the considerable gains that have been made over the years.

There were 7 years between the dotcom and the financial crises. The next major decline occurred in August 2015 but it was short lived and did not result in a major crisis. In 3 years more, Trump became the US president and started resolving the negative trade balance issue by imposing customs duties on China. This, together with tax reforms, supported the markets a lot, and they went on growing. However, the situation is rather tense now, and the fall coming alone may lead to the investors being rather worried. The companies hit their earnings historical highs every quarter, and this may make the management feel dizzy.

Still, there are companies that, unlike most of their counterparts, did not grow following the Trump election. One of them is Teva Pharmaceutical Industries Limited (NYSE: TEVA). When the market started growing after the US elections, TEVA started going down heavily, eventually losing over 80% during 2 years. The company started having problems in 2016 when they bought Allergan (NYSE: AGN) at $40.5B. Before that, TEVA capital had been growing steadily since 2006, while the debts had been at the minimum.

Once TEVA acquired Allergan, the debt went sharply higher, which provoked a selloff immediately. At the same time, the earnings also started falling.

Even the quarterly earnings in 2016 were not enough for investors, as the stock price first did not move much, and then hit the support at $50.00 in the middle of the year and went further down.

The outlook is disappointing, and one would never even think about trading this stock, but still there are some things one should consider well.

Many years ago, many people lived in the countryside or at least used to spend some time there, and few heard of such a thing as an allergy. Then, however, people start migrating to cities, which are very polluted. This, perhaps, led to allergies being quite widespread nowadays. Allergies can be quite dangerous, as in many cases it may provoke an allergic shock, with the patient literally hanging between life and death. In this case, the only thing they need is a medicine that will help them survive before the ambulance arrives.

This is exactly what Teva Pharmaceutical Industries Limited created EpiPen, a medicine that removes allergic shock caused by insect bites, food, other medicines, or physical activity. An injection of EpiPen is enough to stimulate the cardiovascular system and the respiration organs, which prevents the consequences of an allergic shock.

According to some sources, in the US, there are around 43M people who may suffer from allergic shock any minute and should have such a medicine at hand. Ideally, such a person has got to have 2 doses of EpiPen, as sometimes one may be not enough. These two doses cost around $375, while the competition are trying to create the same medicine using adrenaline that should make it much cheaper. Still, they are having problems with medical tests, which means EpiPen has no competition right now. Another point is that it should be used within 12 months; otherwise, you will have to buy another dose. This brings stable profits, the ethical aspect is taken away.

Teva Pharmaceutical Industries Limited is a multinational company with 66 plants in 60 countries. This is one of the biggest pharma companies out there, and it’s no wonder that Warren Buffett has paid attention to it. In Q2, Berkshire Hathaway increased its stake of TEVA shares to 4.3%, or 2,7M shares, and is now one of the top three shareholders.

Meanwhile, in November 2017, a new CEO came to TEVA. Kare Schultz reduced costs drastically, and, as a result, the debt stopped growing first, and then was reduced by over $10B.

Technically, the downtrend is finishing, and an uptrend may start in the midterm, with the support being located at $20.00.

Disclaimer

Any predictions contained herein are based on the authors’ particular opinion. This analysis shall not be treated as trading advice. RoboForex shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.7 stars on average, based on 17 rated postsHaving majored in both Social Psychology and Economics, I went on to continue my education in post graduate. Later I worked as a team lead of a tech and fundamental analysis lab in the Applied System Analysis Research Institute. This helped me to acquire all necessary skills and experience to become a successful trader and analyst, as well as a portfolio manager in an investment company. I'm a pro in the financial field and the author of articles for various international media. I also hold the position of Chief Analyst at RoboMarkets.




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Altcoins

Bitcoin Cash Price Analysis: BCH/USD May Have to Return to $400, Before Big Bull Buying

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  • BCH/USD price action did form a potential double top formation, subject to a move back towards the neckline.
  • The RSI indicates price is oversold via the 4-hour chart view, after bouncing in early hours of Monday.

The Bitcoin Cash price remains firmly on the back foot. As a result, of a top area being produced within a heavy touted supply zone. This can be seen within the $650 price region, which as a result has caused BCH/USD bulls to falter in their tracks north. Back in the very early part of September and most recently on 7th November has seen the sellers pile in at this area.

BCH/USD daily chart

Given the current price behavior it would suggest technically, the bears are looking to force a retreat, Eyes would be towards the neckline of the set up. This would see BCH/USD returning to $410, as demonstrated during the selling pressure back in early September. A likely area to attract buyers back in, a failure however to see this area of support hold, could be very punishing indeed.

Possible Neckline Breach

BCH/USD Neckline

Should a breakout to the downside from the $410 area support occur, heavy selling pressure may be seen. Eyes would then be on for a potential steep fall, down towards $285, the next major level of support. BCH/USD last traded down here on 13th October 2017, after seeing a chunky breach through the above-mentioned neckline.

4-hour Chart View

BCH/USD 4-hour chart

Looking via the 4-hour chart view, BCH/USD price action is moving within a descending channel formation. This is very much subject to a potential breakout to the upside; however, as described above, the price may need to retreat towards $410. Near-term resistance can be immediately seen at $530, which is the upper part of the channel.

The resistance above trend line of the detailed technical set up should this continue to hold; it raises the case to the top formation play out. A breakout to the upside now could send BCH/USD flying back for a retest of the $650 region supply. To the downside, support should be noted around the psychological $500 level.

As detailed above with the descending channel, this could also be perceived as a text book bull flag pattern. Such a move coming into play after a decent run higher, to then cool, ahead of another burst to the north. Looking via the RSI, it did hit a bottom, running into oversold territory. This occured in early hours of today – Monday 12th November.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 44 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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Analysis

Pre-Market Analysis And Chartbook: Dollar Hits 16-Month High as European Assets Fall

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Monday Market Snapshot

Asset Current Value Daily Change
S&P 500 2,771 -0.23%
DAX 30 11,381 -1.28%
WTI Crude Oil 60.95 1.79%
GOLD 1,205 -0.36%
Bitcoin 6,367 0.14%
EUR/USD 1.1265 -0.61%

It has been a choppy and somewhat bearish day so far for risk assets, with the Brexit talks making headlines yet again. European assets are under pressure, since the chances of a deal are fading, while there seems no progress in the EU-Italy debate either.

Equities in Europe are down significantly, lagging the other key markets, but the Euro and the Pound are behaving the weakest, with the common currency hitting a new 16-month low against the Dollar, and the GBP/USD getting close to 1.28 yet again.

EUR/USD, 4-Hour Chart Analysis

The break below 1.13 in the EUR/USD that we have been anticipating could be a key move in forex markets, especially if it’s followed by a quick move towards the 1.10 level. For now, a failed breakdown is still a possibility here, but given the strong broader downtrend, odds favor further new lows in the pair in the coming weeks, together with new highs in the Dollar Index, which also rallied to its highest level since mid-2017 today in early trading.

The next major support zone is found near 1.1125 in the most traded forex pair, while resistance is still ahead near 1.1440 and 1.15.

Dow 30 Futures, 4-Hour Chart Analysis

US stock futures are also pointing slightly lower after Friday’s selloff, but the pre-market losses are muted, and the resilience of the major indices could point to, at least, an initial rally after the opening bell. Today, trading volumes could be lower-than-average on Wall Street, due to the US bank holiday, but given the technical setup, we could be in for an interesting session.

The major indices are at a crucial juncture, as a move towards the October lows could confirm the deeper bearish shift in the US that already took hold of the majority of global markets, while a less likely rally to new swing highs could set up a test of the all-time highs, at least in the relatively stronger indices, the Dow and the S&P 500.

Oil Bounces but Gold Fails to Recover Despite Risk-Off Shift

DAX 30 Index CFD, 4-Hour Chart Analysis

While global equities have been mixed today before the US open, the distinct weakness in Europe points to another leg lower in the broader downtrend, and the DAX could be the most important laggard in the coming days again. While the German index is still well above its recent lows, it is also clearly below the 12,000 level that marked the potential long-term breakdown, which could be the start of a bear market.

The coming days could be crucial in deciding the fate of the current swing, which could define the end of the year across asset classes. For now, markets are quiet, with the main volatility measures being well below the levels seen in October, but should the bearish move accelerate, things could quickly get heated again, as soon as the second half of this week.

Gold Futures, 4-Hour Chart Analysis

Commodities are having a mixed day as well, with crude oil being well in the green, but with gold and copper failing to rally in the face of the Dollar’s rally. The WTI crude contract rallied above $61 per barrel in early trading, while gold fell as low as $1204, extending the breakdown of last week, as safe-haven flows weren’t enough to hold the precious metal.

All eyes are still on the $1215 level, and should gold remain below that short-term resistance, the test of the $1180 level would be likely. Bulls would need a quick rebound to keep the October break-out alive, even gold continues to outperform most of the other safe-haven assets, such as the Japanese Yen and US Treasuries.

ChartBook

Major Stock Indices

S&P 500 Futures, 4-Hour Chart Analysis

Nasdaq 100 Futures, 4-Hour Chart Analysis

VIX (US Volatility Index), 4-Hour Chart Analysis

FTSE 100 Index CFD, 4-Hour Chart Analysis

EuroStoxx50 Index CFD, 4-Hour Chart Analysis

Nikkei 225 Futures, 4-Hour Chart Analysis

Shanghai Composite Index CFD, 4-Hour Chart Analysis

EEM (Emerging Markets ETF), 4-Hour Chart Analysis

Forex

USD/JPY, 4-Hour Chart Analysis

GBP/USD, 4-Hour Chart Analysis

EUR/GBP, 4-Hour Chart Analysis

AUD/USD, 4-Hour Chart Analysis

Commodities

WTI Crude Oil, 4-Hour Chart Analysis

Copper Futures, 4-Hour Chart Analysis

Featured image from Shutterstock

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.7 stars on average, based on 392 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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Analysis

Ethereum Price Analysis: ETH/USD Subject to an Extended Breakout Higher

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  • ETH/USD price action has formed a bullish pennant via the 4-hour chart view.
  • Ethereum network hard fork scheduled for January 16th 2019, but still subject to potential change.

ETH/USD price action has cooled since the recent bull run. This isn’t too surprising given the fast gains seen initially and the touted profit-taking following the explosive move north. A technical move appears to be the case across much of the market. Price action looking ready to breakout again.

Ethereum News Flow

The developers at Ethereum have now set a new date of January 16th, 2019, for their scheduled hard fork of the Ethereum network. This came at the back end of last week, on their bi-weekly call, where they discuss anything relating to the blockchain technology.

It was detailed that this agreement made via the call was non-binding verbal, leaving room for that date to still be moved, should any issues or problems come to light. Hacked’s Sam Bourgi covered in a recent crypto market update.

As covered in October via Hacked, Ethereum’s software upgrade saw a failure. The hard fork that they had been working on did not activate on their test network Ropson. This was largely anticipated to have been activated in November. As a result, they were forced to delay.

Technical Review – ETH/USD

ETH/USD daily chart

ETH/USD price action has been cooling, after failing to break above vital resistance seen around $220-225. This is in proximity to the 61.8% Fibonacci. Over 6% has been lost after the decent advances seen from 30th October, breaking out from pennant pattern.

The price was initially contained within the mentioned pattern since September. Bulls however gained some upside momentum at the back-end of October, seeing a breakout to the upside. ETH/USD had gained over 15%, up to the high print on 7th November, just above $225.

At present ETH/USD is somewhat magnetized to the 50% Fibonacci, hovering around the $210 price area. Clearly it has re-entered consolidation mode after the surge higher last week. This type of behavior is typically seen following on from explosive moves.

4-hour Chart View

ETH/USD 4-hour chart

Looking via the 4-hour chart breakdown, given as mentioned above, the current consolidation state, a bullish set up has formed. A bullish pennant pattern, as a result of the cooling from the high area on 7th November has formed.

Near-term resistance is eyed between $214-215, the upper trend line of the pennant. A breach above, will likely see a retest of the 7th November high. Further north, a strong area of supply can be seen running from $230-235.

ETH/USD faltered in the above supply area on several occasions, from 27th September up until 10th October. Lastly, in terms of upside, $250 would be a target for the bulls. The price hasn’t been up at these heights since 21st September, where it encountered strong sellers.

To the downside, immediate support is eyed around $210-208, the lower trend line of the pennant pattern. Any breach here, could very well see a fast move back down sub $200, buyers are seen around $195.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

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4.5 stars on average, based on 44 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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