Teva Runs Out Of Buyers After Changes In C-Suite

Teva Pharmaceutical Industries Ltd (ADR) TEVA shareholders have had an extremely volatile couple of months. After an August guidance and dividend cut sent the stock tumbling from a July high of $33.67 to a September low of $15.22, Teva shares popped to above $20 when the company announced the addition of new CEO Kare Schultz.

Back on Sept.11, Benzinga cautioned investors about short-term rallies in stocks following management changes. Stocks tend to jump on the news only to drift lower in the weeks that follow as the reality sets in that it takes months or even years for new management to turn the tide at a struggling company.

Since our Sept. 11 cautionary report, Teva shares have declined 4.9 percent.

Looking ahead, all of the volatile recent trading has made the stock’s chart difficult to read from a technical standpoint. For now, $17 seems to be near-term support for the stock, and Wednesday’s 1.8 percent gain following seven consecutive nearly flat sessions is a bullish sign.

If Teva holds on to most of its Wednesday gains into the close, it could be on its way back up to test the $20.10 high following the new CEO announcement. If the stock fails to reach the $20 level, it could simply be forming a lower high that is indicative of a longer-term bearish trend.

Until Teva breaks above $20 (bullish) or below $17 (bearish), the stock’s daily trading will continue to be unpredictable. The battered biotech stock is now down more than 51 percent year to date.

Joel Elconin contributed to this story.

Related Link: Teva's New CEO Is A Positive Catalyst