Yahoo Finance 3 Big Stock Charts for Friday: GoPro Inc (GPRO), Valeant Pharmaceuticals Intl Inc (VRX) and Microchip Technology Inc. (MCHP)
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The market is trying to make a move back towards its highs for the last day of the week as light earnings reporting and no headline risk are allowing investors to push stocks higher on lighter volume. There are, as always, some stocks that are breaking the mold today and making large moves higher and lower.
Today’s three big stock charts look at the charts for GoPro Inc (NASDAQ:GPRO), Valeant Pharmaceuticals Intl Inc (NYSE:VRX) and Microchip Technology Inc. (NASDAQ:MCHP) as these companies are making moves that put them in the top five for each of their indices.
GoPro Inc (GPRO)
Leave it to GoPro to figure out a way to pull a good quarter off. The company that everyone has written-off for dead now has the shorts running for the hills and squeezing the price higher. Is it a good buy at these levels? The charts will tell us.
The 20% rally in GPRO shares has catapulted the stock above its 50- and 200-day moving averages, both of which have been trending lower. The technical breaks are bullish, in a way, but traders shouldn’t jump too quickly at the chance to buy this stock right now.
GoPro’s surge has moved it above its long-term 10-month moving average, but the bearish 20-month moving average is just overhead at $10.82.
The one-day move has shot GPRO stock into overbought territory, signaling that we are likely to see profit-taking as soon as the shorts get their positions close out.
Valeant Pharmaceuticals (VRX)
Moving lower in sympathy to Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA), Valeant shares are slumping lower to test their 50-day moving average. VRX stock makes this move ahead of earnings next week, signaling that we could be seeing an opportunity to buy lowered expectations ahead of the number.
Many pharma companies, including Valeant, are getting hit by Teva’s latest report and outlook. These stocks are trading lower in sympathy, but in many cases opening opportunities.
VRX shares are closing-in on their 50-day moving average as a technical test today. A successful test of this trendline ahead of their earnings next Tuesday should improve the short-term trading prospects of the stock.
Shares of Valeant are approaching an oversold reading of their RSI. In many cases, this alone is a bullish indication ahead of an earnings report as it suggests that traders have “sold the rumor.”
Microchip Technology (MCHP)
Microchip Technology came out with earnings numbers that surprised the market after traders had clearly sold this stock out ahead of earnings.
With MCHP shares trading more than 3% higher, more upside appears available for traders looking for a new bullish stock.
Microchip Technology shares are surging on a positive earnings report. The stock had been languishing in a range and drifting lower ahead of the report as investors “sold the rumor.” Now the stock should have the benefit of a “buy the news” rally to look forward to.
MCHP stock’s short interest ratio was 12.6 ahead of earnings, suggesting that the company is set for a follow-up short squeeze rally.
Microchip Technology shares are now breaking above the $83-level, which has been resistance for the stock over the last month. This combined with the positive earnings report and short squeeze should target a move to $88.
As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.
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