Pfizer, a stock on which Ive commented extensively on Prudent-Trader.com, got a boost today as the FDA announced that the benefits outweigh the risks with Pfizers drug, Celebrex. The FDA issued the important statement that it does not think removing Celebrex from the market is warranted. The statement took a huge weight of the neck of Pfizers stock price, and it shot up 5% today.
It is interesting to note that the FDA released a one-liner about 20 minutes before the full statement. The one-liner simply stated that Celebrex increased a patients chances of suffering a heart attack or stroke. This old news promptly whacked 2.5% off Pfizers valuation. Minutes later, the full release, including the statement that Celebrex should stay on the market, sent Pfizers price soaring. I wonder who in the FDA was helping friends make a quick buck
Our take on this development is that Pfizer will continue to rally. The company has now enjoyed two important positive news releases in the last couple weeks, the first being a positive clinical trial result of it stomach cancer drug. From a technical perspective, Pfizers chart is also pointing for a greater move upwards. In the low-to-mid $20s, Pfizer is a value stock, but had a cloud hanging over it. We believe that many fund managers were sitting on the sidelines waiting for the air to clear for Pfizer. Over the next several weeks, many funds should begin building positions and a further move upward is likely.
It has been a while since I've discussed metals, and they have been having fun while I was silent! Silver has bounced about 17% off its recent low and gold has tacked on about 4%. Much of this move is bullish pressure spurred by the November and December trade deficit figures. Although the moves are justified from a fundamental standpoint, I am not convinced they will hold in the short-term. Its just a contrarian hunch, but I believe the dollar may surprise the markets with an extended rally. Also, I saw an advertisement on CNN today hawking a why you need to buy gold now packet. That has to be a short-term bearish signal!
Authors Disclosure: Long PFE