I’m placing a hold on Genzyme Corp’s (GENZ) shares, first recommended on June 19, 2009 at a price of $55.02. If you’re tempted to Buy GENZ’s recent dip, hold-off. Here’s why.
Genzymes’ fundamentals suggest brighter days are ahead: The First Call FY2009/FY2010 EPS estimates for GENZ are $2.25 to $3.54. However, the stock’s technical indicators have deteriorated this autumn, and indicate otherwise: the stock again dipped below the key, 50-day moving average, and also fell below psychological support at $50. Further, GENZ’s chart now represents a bear hug — a bearish pattern, and the rule is: when the fundamentals and technicals conflict — stand aside.