Valeant Stock Analysis For 2017:
It’s no secret that VRX has been dropping over the past few weeks. I should also mention that the stock managed to bounce into the high teens, but this didn’t last long, as Valeant crashed upon its earnings report. In the midst of this, I was holding puts that I sold for a nice profit. Moreover, when I was making my bearish calls, which just about all turned out to be true, VRX bulls were bashing me. Now, let’s get into this Valeant stock analysis.
Valeant Stock Forecast:
So, I’m here again to let you know my next bearish prediction: I believe that this troubled pharmaceutical company will drop below $10 a share in 2017, sooner rather than latter. Obviously, I have no concrete evidence to prove that this will happen, but there are some clues as to why a sub $10 VRX is on its way. Firstly, please take a look at the image below.
As you can see in the put option chain for March 17th, there is big open interest for the $10 puts. Of course, this seems a bit soon for that drop to happen but its not impossible. However, what is key is that “smart money” is betting on the collapse of this stock. In fact, I was seeing the same kind of open interest for $12.50 put options two weeks ago, before the stock tanked below $12. In short, if this option activity continues, I think the fall in share price will come when its due (less than six months at the very most).
Also, look at the graph of VRX below.
There is no need for technical analysis because its clear that this stock is heading straight for penny stock land.
Conclusion of this Valeant stock analysis:
While short-term bounces are possible and probable, the ultimate direction is downwards for VRX. This is due to the short sellers and put buyers piling onto the stock, the horrible management, destroyed company and bag holders eventually cashing out as holding the stock becomes unbearable. I expect to get hate from this controversial post like last time, but I also expect to be right once again. Finally, I predict that Valeant stock will reach the $8-$10 range within the next 6 months.