The Medicines Company : Breakdown of the USD 22.3 is anticipated
Entry price | Target | Stop-loss | Potential |
---|
$22.36 |
$18.9 |
$23.4 |
+15.47% |
---|
The Medicines Company is in downward trend and there are no technical levels allowing it to rebound.
The fundamental situation of the company remains fragile. Currently, the company is trading 1.8 times its sales, which is still a significant valuation for the company. Moreover, the company will be in deficit this year, which not giving insurance for investors. Downward revisions of EPS are giving one more negative argument.
From a technical viewpoint, prices are in a downward trend. Moving averages are trending down and put pressure on the stock, which confirms this downward momentum. This trend may continue toward the USD 18.9 support but investors should wait for a breakdown of the daily support (USD 22.3).
Therefore, we could take a short position to benefit from the breakdown of the mid-term support. The security could quickly go toward the next support area located at USD 18.9. A stop loss will be placed on USD 23.4.
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