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Shares of Pfizer Inc. (NYSE:PFE) continue to head higher on Wednesday, a day after the company announced that it has secured a three-year grace period from President Donald Trump's tariffs on pharmaceuticals. This will enable Pfizer to offer its medication at significantly discounted prices compared to current rates.
This news appears to have triggered a breakout in the shares. This can have bullish implications and may indicate that they will continue to move higher. This is why Pfizer is our Stock of the Day.
Many analysts overcomplicate their market analysis. It seems as though they forget that markets are driven by supply and demand.
If there is more demand for a stock than there is supply, the price will trend higher. If there is more supply or shares to be sold than demand or shares to be bought, the stock will head lower.
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This shifting of supply and demand is what a chart illustrates, provided that it is understood and analysis is applied correctly.
As you can see on the chart of Pfizer, the $25.90 level has been resistance. Since February, the stock has had numerous uptrends because there were more shares to be bought than there were for sale.
But each time it reached the resistance, the sellers overpowered the buyers and ended up pushing the shares lower.
Now Pfizer is trading above this important level. When a stock can eventually trade above its resistance level, traders will say that it has broken out. This can be a bullish dynamic.
If the price is above the resistance, it is reasonable to infer that the traders and investors who created the resistance with their sell orders are gone. They have either finished or canceled their orders.
With this large amount of supply removed from the market, those who wish to buy Pfizer will need to be aggressive and bid premiums if they want to draw sellers back in. This could force the shares into an uptrend.
PFE Price Action: Pfizer shares were up 5.44% at $26.86 at the time of publication on Wednesday. The stock is trading within its 52-week range of $20.91 to $30.43, according to Benzinga Pro data.
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Posted In: PFE
