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Big Pharma Outperforming: PPH BMY MRK

 

October 21, 2009

BY Rick Pendergraft:

Contributor, Stock Traders Daily

Real Time Trading Reports:  Included are detailed trading reports designed to help investors realize opportunities in these companies as earnings are released.  The reports are linked to the stock symbols in the article below. Performance - Click Here

(La Jolla, CA)  Large-cap pharmaceutical companies have delivered some impressive earnings results so far this earnings season, but the price performance hasn’t necessarily been as impressive.  The Pharmaceutical HOLDRs Trust (NYSE: PPH) has moved to the upper rail of its trend channel, but most of the move came before earnings started getting released. 

Two of the ten largest pharmaceutical companies in the United States will release earnings on Thursday before the market opens and these two reports will certainly have an impact on the PPH. 

Bristol-Myers Squibb (NYSE: BMY) is expected to earn $0.51 per share, a five cent decline from the $0.56 the company earned last quarter.  With all the companies that have fallen short in one earnings report or another in the past year, BMY has managed to meet or exceed expectations in each of the last four quarters.  Despite the ability to deliver better earnings reports than analysts have forecasted, the sentiment towards the company isn’t overly optimistic.  From a technical perspective, BMY is facing resistance at the $23.25 level.  What should you do with BMY?  Check out our free report to learn more.

Also releasing earnings on Thursday morning is Merck & Company (NYSE: MRK) and the company is expected to earn $0.82 per share.  This is an improvement over the $0.77 per share the company earned last quarter.  Unlike BMY, Merck has not always been able to meet expectations as the company missed in the first quarter.  Like Bristol-Myers, MRK is facing resistance, with the 100-week moving average resting just over the current price level.  The sentiment towards Merck is more optimistic than what we see on BMY, so it will take a more impressive earnings report to move the stock higher.  To get a more in depth view, request our report on Merck.

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