The recurring theme at InvestingHaven is that its research team creates news that really matters to investors with one of the major themes being that the really juicy opportunities are the ones that are invisible for both financial media as well as most investors. The generic drug stock market sector in its current state is a textbook example. At InvestingHaven we are covering this as a major and breaking news topic: a major move is brewing, and we identify this based on very constructive market conditions.
Generic drugs, known for being a more affordable alternative to the original brand name drugs, have the same amount of the active pharmaceutical ingredient as the original, while some details such as the taste and packaging could vary.
These generic alternatives are usually available once the patent protection expires on the original drug. Since it seems the gross profit margins are higher for branded drugs manufacturers and that make more from generic drugs, it is safe to say that this is a profitable business and that pharmacies and intermediaries have a strong incentive to promote these products. Just from 2003 to 2012, using generic drugs generated $1.2 trillion in U.S. healthcare savings according to wikipedia.
This article covers 3 stocks with constructive chart patterns in the generic drug industry. All of these 3 generic drug stocks are slowly moving up and represent interesting setups based on the charts. As always due diligence is required as well as consulting with your investment adviser.
3 stocks with constructive chart patterns in the generic drug industry
Drug stock #1 Allergan
Allergan, a pharmaceutical company operating within three segments: US Specialized Therapeutics, US General Medicine and International. The company’s chart is showing a clear bull flag that usually indicates the continuation of the upwards move. It is also approaching an important support level that would represent a good entry provided the support annotated with the dotted line holds.
Drug stock #2 Mylan
Although it’s registration is in the Netherlands, Mylan is an American generic and specialty pharmaceutical company. The chart shows one of our favorite setups where the price broke out of a major resistance level and is in the process of back testing the breakout level. If the back test is successful (previous strong resistance is in the process of becoming a strong support), then the uptrend will continue offering an interesting setup for investors.
Drug stock #3: Horizon Pharma
Horizon Pharma is an Irish pharmaceutical company that focuses on pain, arthritis and inflammations drugs. Although the extreme price volatility is visible even in the long term log chart (gaps), the overall trend is still intact and the up trending channel is intact.