Pharma Stock Could Push Back Toward Highs

BHC pulled back to a historically bullish trendline

The shares of pharma stock Bausch Health Companies Inc (NYSE:BHC) have taken a tumble since their recent April 3 nearly two-year high of $11.46. Starting off this week on a sour note with a 6.9% loss — BHC’s worst daily percentage drop since September — the stock is looking to extend its slide today, down 2.5% at $9.03 at last glance. 

For those curious about buying in on the dip, however, the recent pullback has BHC within one standard deviation of its 50-day moving average, a trendline with historically bullish implications. According to Schaeffer’s Senior Quantitative Analyst Rocky White, the equity has two similar signals in the past three years, after which it was higher one month later each time, averaging an impressive 14.6% gain.   

BHC apr10

Furthermore, despite the stock’s 16.6% year-to-date gain and recent peak, the majority of analysts are bearish, leaving plenty of room for upgrades that could provide tailwinds. Of the six analysts in coverage, five carry a “hold” or worse rating. 

A bout of short covering could give BHC a boost as well. Short interest has started to unwind, but still represents 6.8% of the stock’s available float, or nearly nine days’ worth of buying power. 

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