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Regeneron Pharmaceuticals, Inc. Message Board

  • eyesandears51 eyesandears51 May 24, 2013 10:42 AM Flag

    REGN: Near Term Correction, Mid to Long Term Positive

    REGN shares today are dropping by 2%, continuing a correction begun on May 15. The stock has retrenched from a high of $ 283.99 on May 15 to a low of $ 245.52. Every day since May 15 REGN has registered lower low’s and lower high’s. The stock’s technical’s are also weakening. The MACD began an accelerating trending down mid May. REGN broke below trading is below the 20 day SMA. The 5 day EMA is now lower than 13 day EMA. The medium and longer term prospects for REGN are positive, but in the near term the trend is negative. Lastly corporate officers, prominently the CEO and CFO have been aggressively selling over 500,000 shares in 36 transactions. This is supplemented by institutional selling. Absent a positive catalyst to reverse the correction, the stock could retrench to the high $ 214’s near term support level. The short term risk adjusted return is biased to the downside into next week.

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    • REGN is now it's third correction since May 15, based on disappointing quarterly results, as compared to consensus. The nearly 7% drop is confirmed by very high trading volume, and deteriorating technical's. Today REGN broke below the 20 day SMA and came within a dollar of breaching the 50 day SMA. The 12/26 day MACD crossed the 9 day, and the 5 day EMA also crossed the 13 day. Similar to the May 15 correction, insiders telegraphed the impending decline by selling 644,000 shares in 33 separate transactions. 5.8% short interest, while not excessive, is higher than in the past. Options contracts are also flashing caution, August 17, and September 21 open interest is highest @ $ 240 and below.

      The company just reported and near term positive catalyst's are not evident, consequently the stock may correct by the -15%-16% experienced in the last two pullbacks. This implies a support level of $ 221- $ 227 reached within a week or so. This correction is less than half over, based on recent REGN share price performance.

      • 1 Reply to eyesandears51
      • Quarterly earnings call concerns tanked the stock. Revenues and earnings/ share were $ 16 million, and $ .08 respectively below analysts expectations. The company has a high dependency on one drug, Eylea, primarily in one country ( USA ). European sales, @ $ 100 million, are small and profits are split with Bayer. Other drugs and indications for Elyea will take some time to move the needle. Stock is high beta, and requires exceeding quarterly consensus, and guiding higher to support lofty 2.74 PEG.

        Mid term the prospects are favorable, but S/T the stock is likely to pullback to the low to mid $ 220 range you projected. This is particularly true if the broader market realizes a 2-5% mini- correction.

    • REGN has dropped below the 20 day SMA. Based on the current trajectory, the $ 221.96 50 day SMA could be breached today or tomorrow.

    • The REGN correction that began on May 15 continues unabated. Stock is down another 3.33% today. The stock is down nearly 15% from the May 15 high. Tellingly, every day since mid May the stock is registering lower high's and lower low's. One measure of market sentiment is options. June 22 puts are showing the highest open interest in the $ 210 -$ 240 range. In aggregate, the technical's suggest that without a new catalyst to change the negative market sentiment, REGN is headed towards the $ 214 support level.

    • How do you profess to know the mid to long term future? Mental speculation is useless.

      Sentiment: Strong Sell

      • 1 Reply to thomaswolski
      • thomaswolski

        Only market historian's looking backward, or those gifted with the powers of prophecy know the future. Most of us are neither. What we do know is: 1- S/T REGN is experiencing a correction since May 15, that has not yet played out. 2- Over the past several years REGN stock has been in the top 5 market performers. 3- With some regularity, the upward trajectory of REGN stock, has been punctuated by corrections and periods of consolidation. 4- The company has a differentiated product with growing market penetration, and a robust clinical pipeline.

        I personally use macro trends and fundamental's to identify investable companies, like REGN, and rely on technical's to determine entry/exit strategies. The future is not knowable until it is the past.

    • So where do you see the bottom....I am tempted to bail....

      • 1 Reply to shabir3934
      • shabir

        I exited the stock last week, when the weakening technical's were confirmed by the beginning of the stock's correction. I look to re-enter, in increments, when either the REGN reaches it's high $ 214-15 support level, evidences a reversal of the current correction, or realizes a NEW positive catalyst. As discussed, I am positive mid to long term, but believe the S/T correction that began mid May will accelerate before reversing.

    • The stock's chart seems to be forming a clear and obvious head and shoulders, and if so would fall back to at least $215 and possibly as low as $175.

      Sentiment: Strong Sell

      • 1 Reply to hoxstox
      • hoxstox

        The head and shoulders pattern is confirming the pullback since mid May. I concur with you and Eyesand Ears that $ 214-$215 is the first support level. If it hold's, on confirming volume, the profit taking will likely be played out. Dropping below that support will represent a deeper correction that is rare but not unprecedented for REGN.

    • I agree, REGN is indeed going through one of it's many periods of consolidation and profit taking before resuming it's share appreciation trajectory. Some investors may choose to take a longer view and power through this correction. Others may not wish to absorb the pain and risk catching a falling knife, preferring to exit and wait for the beginning of the upturn.

      • 1 Reply to crkenmore
      • of course you guy (s) are agreeing with each others, considering that you are shorting the stock. what about $120 for a correction?! sounds better? Corporate officers have been selling the stock at the same pace, they are scheduled sales. "absorb the pain"!? what are you talking about?! you have to be out of your mind to sell REGN now, or unaware of the reason why you have invested in the first place. who cares about what the stock price will be 5, 10, 15 days from now.

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