Walgreens Boots Alliance Inc WBA 0.07% traders experienced some crazy trading action Wednesday following the company’s third-quarter earnings beat. The stock quickly bounced back from its intraday sell-off, but the Walgreen’s technical picture is still pretty ugly at the moment.
After peaking at $83.89 in early September, Walgreens stock has sold off hard and fast amid increasing evidence that Amazon.com, Inc. AMZN 0.65% will be entering the pharmacy business sooner rather than later. The Amazon threat sent Walgreens stock to new multi-year lows headed into its Q3 earnings report. The stock dipped meaningfully below $70 for the first time since late 2014.
After reporting an earnings beat, the stock opened Wednesday’s session with a nice pop from Tuesday’s close of $69.29 up to around $70. However, within an hour of the opening bell, Walgreens stock had given up all its earnings gains and made new lows down to $66.05.
The post-earnings selling pressure was likely due to the massive overhead supply of shares. In addition to earnings traders taking profits, there are now nearly three years worth of Walgreens buyers who are underwater on their positions and potentially looking for an exit point.
The good news for Walgreens bulls is that the stock quickly recovered after the rush of morning sellers and closed the day up 3.0 percent to above $69. The positive momentum continued Thursday, with the stock up another 0.2 percent in early trading.
Unfortunately, Walgreens is up still against what could be major long-term resistance. The $70 level, which represents the previous multi-year low for the stock, could prove…
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