Valeant Pharmaceuticals Intl Inc (NYSE:VRX) stock makes yet another breakout on strong volumes.
Shares of the Canadian pharma company, Valeant Pharmaceuticals Intl Inc (NYSE:VRX) are making heavy gains after the Q1 earnings. Laval, Quebec-based Valeant' stock is up by nearly 50% in the last 5 trading days. The stock had recently broken above its crucial 20-day and 50-day Simple Moving Averages (SMA) on rising volumes. In yesterday's trade, in a bullish move, VRX stock price made a breakout above its long-term 100-day SMA on heavy volumes. A breakout with strong volumes suggests that the 100-day SMA could become a strong support line for the stock in near term. The next level of resistance is its 200-day SMA which presently stands at 17.76. To test the next resistance level, the stock has to gain another 29% from yesterday's close, which could be very difficult. As Valeant already has made tremendous double-digit gains in the last few days and the stock is overbought on the basis of Relative Strength Index (RSI), as well as the Bollinger Bands. The current RSI measure stands at 86.28 comfortably above the standard overbought threshold measure of 70. The share price has also breached the upper Bollinger Band indicating an overbought condition. The next few trading sessions are vital, if the stock continues to edge higher on good volumes then it may test the next resistance level. Otherwise, the 100-day SMA is likely to act as a good support.
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