A Pharmaceutical Stock Poised to Rise

This is a stock that we had recommended in early September, actually it was mentioned as a superb buy on our investment DVD that was made in early September. We recommended this stock last September for a variety of reasons, both technical and fundamental.

Teva Pharmaceutical (TEVA) - This worldwide pharmaceutical company known for its bio-generics and active pharmaceutical ingredients, has been in an uptrend since the late '90's.

Since our September recommendation, TEVA is up close to 16% in only 4 months. However, TEVA is still showing some positive signs and potential for another burst higher.

What is the potential for TEVA?

Another 10-15% higher within several months. Why? Technically TEVA has recently been in a very bullish pattern on the daily chart, this pattern is called a bullish flag. Also, TEVA has just broke upwards out of the bullish flag pattern which is a confirmation. With the nature of bullish flag patterns, TEVA should head another 10% higher minimum within a relatively short period of time, 3-6 months.

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Recently, TEVA's strong upward trend has made it an institutional favorite. The 50-day moving average has been where buyers have been trampling this stock and supporting it on the way up, so you may want to consider buying at the 50-day simple moving-average. This moving average is a simple indicator available on many free chart packages including Yahoo Finance and MoneyCentral.

The recent pullback to the 50-day moving average resulted in the normal buying, but shoved it from a small flag that tells us that the advance will more than likely continue with a minimum short to medium term target in the high $60 area.

Recently, S&P just rated TEVA a "five-star strong buy" with a price objective of $70. Lastly, fundamentals are still very healthy for this "drug" stock as well. Therefore, TEVA is a great buy and would be a great addition to the large-cap portion of your portfolio. Also, one thing to remember is that historically the health care sector has been among the top performers when coming out of recession.