Market Update: In the last trading day, the markets saw another big gain. This was the result of both positive news coming from the Administration and Congress coming close to passing the bill they have agreed to.
Despite this positive news, we believe there is a great deal of uncertainty with the impact of the virus on the economy.
Even after the last two days’ gains, we are still firmly in a bear market as the major indexes are still far below their previous highs.
Now, even though we are still in a bear market, the market could turn quickly just as it did the past two days. To protect ourselves from these whipsaws we like to have a few hedges in our portfolio. We’re always shifting our strategies and adding those hedges in our PowerTrend Options portfolio.
So today’s chart will be for a stock that has remained bullish despite the selloff.
Yesterday, we looked at a Daily Price Chart of Zoom Video Communications, Inc. and noted that the stock had been making a series of higher highs and higher lows.
Today’s chart is a Daily Price Chart with an OBV Chart for Regeneron Pharmaceuticals, Inc. (NYSE: REGN).
Regeneron Pharmaceuticals, Inc., a biopharmaceutical company, discovers, invents, develops, manufactures, and commercializes medicines for treating various medical conditions worldwide. The company’s products include EYLEA injection to treat wet age-related macular degeneration and diabetic macular edema (DME); myopic choroidal neovascularization; and diabetic retinopathy in patients with DME, as well as macular edema following retinal vein occlusion.
The current price of REGN is trading higher than it was exactly six months ago. The On Balance Volume (OBV) Chart is shown directly below the Daily Price Chart.
Here’s what you need to know about the OBV Line: it measures how much volume is either pushing the stock up, or down. Meaning, the volume of stock that’s being sold or bought.
Using a stock’s volume in this way can confirm an uptrend by reflecting that more people are buying the stock than are selling it. Take a look at the chart below…
We can see from the OBV chart shown above that the On Balance Volume Line for REGN is sloping up.
This indicates that the volume is heavier on up-days and buying pressure is exceeding selling pressure.
Buying pressure must continue to exceed selling pressure in order to sustain a price uptrend. So, the OBV Line is a simple indicator to use that confirms the price uptrend and its sustainability.
We’ll be sure to keep following Regeneron Pharmaceuticals, Inc, as the stock’s buying pressure exceeds its selling pressure and the price uptrend continues.
Editor, Chart Of The Day