Before Christmas, the pharmaceutical giant Pfizer drew much speculation in the market once it became the first company to develop an approved Covid-19 vaccination. We see this reflected in the bullish activity leading up to December. Now that additional vaccines are available elsewhere, it seems to have had a detrimental effect on the overall price and the latest trend, and in today’s Chart of The Day, we will aim to discuss where the stock may be heading.
The longer-term trend remains bullish for the time being as we notice price action generating a series of higher highs. One technique that appears to be tracking quite well is the DiNapoli method. If you’ve never heard of Joe DiNapoli, you may find studying his work useful as it’s a practical application of Fibo levels.
Using the prices labeled ‘1’, ‘2’ and ‘3’ that originated back in July/August last year, we find an initial target of $40.30 (T1) followed by a primary target of $43.15 (T2). As the chart shows, T1 became the November price high, and T2 became another high area in December.
Looking at the same chart using the Ichimoku cloud method below, we can visually see where dynamic support levels are adhering to at the moment. Note the daily closes are remaining just above the cloud. The price action suggests a possible bounce up towards the $40.30 level again before tracing higher. Alternatively, a slip downwards could end up targeting previous support around $35.71 and $33.00 respectively.
Considering the Covid-19 crisis is still very much a global concern, it seems probable that companies such as Pfizer, who are at the forefront of providing life-saving products, will somehow benefit from positive sentiment derived from a cure. However, we must also consider the market as a whole before expecting such news to reflect on individual stock prices.
For those interested in trading PFE as a share CFD, Go Markets has this stock and many more, including companies from the ASX, NYSE, and the NASDAQ.
Note: Click on charts to enlarge.
By Adam Taylor CTEe
Sources: Go Markets, Meta Trader 5, TradingView, Bloomberg
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