Valeant Pharmaceuticals Intl Inc VRX 0.46% shares initially jumpedmore than 7 percent following the company’s second-quarter earnings report. However, in a matter of 24 hours, that gain is completely gone and the stock is trading significantly lower than it was prior to the report.
The messy trading action in Valeant mirrors the messy business outlook for the company.
Valeant beat Wall Street’s consensus on earnings per share and revenue, but revenue was down nearly 8 percent from a year ago. Xifaxan sales were up 17 percent in Q2, but the company once again cut its full-year revenue guidance. Full-year EBITDA guidance was left the same.
With so many mixed signals coming from the company, it’s no wonder investors don’t quite know what to make of the stock. Following Wednesday morning’s session, it appears as though the guidance cut is resonating most with investors.
Technicals To Watch
From a technical standpoint, there are several key areas for Valeant traders to be watching now. The first level to watch for support is the May high of $14.55. Valeant has already dipped below that level in intraday trading on Wednesday, but if the stock bounces into the close it could still potentially serve as support.
Below $14.55, the next key support level is…
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