Endo Pharmaceuticals Holdings Inc. is a specialty healthcare solutions company focused on branded and generic pharmaceuticals, devices and services. The company operates in four segments: Branded Pharmaceuticals, Generics, Devices and Services in therapeutic areas, including pain and urology. It has a portfolio of branded pharmaceuticals that includes names such, as Lidoderm, Opana ER, Voltaren Gel, Percocet, Frova, Supprelin LA, Vantas, Valstar and Fortesta Gel. Branded products comprised approximately 61% of its total revenues during the year 2011. Endo’s non-branded generic portfolio accounted for 21% of total revenues in 2011. Device revenue accounted for 11% of total revenues in 2011, and Endo’s services segment accounted for the remaining 2011 revenue.
To review Endo’s stock, please take a look at the 1-year chart of ENDP (Endo Pharmaceuticals Holdings, Inc.) below with my added notations:
After bottoming at $26 in October of last year, ENDP has been in a steady up trend ever since. While moving higher, the stock has formed a nice trend line of support (navy) during the most recent (4) months. Always remember that any (2) points can start a trend line, but it’s the 3rd test and beyond that confirm its importance. Last week the stock broke its level of support and should moving lower overall form here.
The Tale of the Tape: ENDP had created an up trendline of support over the last (4) months. Now that the support has broken, a short position could be entered now or on a rally up to the previous up trendline.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT