Pfe

Hi Jerry -- What do you think is PFE a good cup and handle.

I like the graph as it has developed since early 2012.
I think the volume is in support of a proper cup and handle reading. (low in the handle and increasing in the right side of the cup).

Appreciate your insight.

Ernst

[QUOTE=ernsttanaka;21478]Hi Jerry -- What do you think is PFE a good cup and handle.

I like the graph as it has developed since early 2012.
I think the volume is in support of a proper cup and handle reading. (low in the handle and increasing in the right side of the cup).

Appreciate your insight.

Ernst[/QUOTE]

Jerry is traveling so I will take a shot. PFE is a good looking cup and handle and is trading very tight. I don't consider it a buy candidate using CANSLIM methods however. Earnings for PFE have been in slow growth mode for quite some time. The last time PFE looked like a good growth stock was perhaps 1999 when PFE topped out at almost twice the price of today. Since then PFE has been in a long decline. It has done just okay since the 2009 bottom moving up almost 100% but consider that a stock like KORS has gone up 100% in 4 months. PFE's last 4 quarters of earnings per share growth were: +6%, +15%, -2%, 0%. Its compounded 5 year EPS growth rate is +1%. Since earnings growth is the fuel for price growth PFE hasn't shown the right stuff in a very long time. Sales growth is also light and averaging around zero change. Good CANSLIM EPS growth should be above 25% and hopefully much more, triple digit EPS growth for example. Compare the price progress of QCOR which is in the same group of PFE. QCOR has gone up 1000% during the time that PFE went up 100%. This is the power of better earnings. QCOR isn't necessarily a good pick right now because it has formed five or more bases on the way up and may be tired now.

You mentioned good volume on the right side and the bottom. All true, and one of the other things to look for is periods near the bottom of the pattern and the handle region where volume dries up. This is an indication that sellers are being depleted. PFE is a good example of this trait. The current cup formation on PFE can also be viewed as a handle on a much larger cup formation that started in June of 2011. This would be a great sign if PFE had had strong earnings growth during the period putting gas in the tank.

Thanks Mike,

Appreciate your insight --

I own PFE since Dec 2010 for 17.25 as part of a "safe" dividend portfolio. I see your point were it comes to earnings growth and stronger stock. I was 'surprised' by the cup and handle -- since this is the cleanest C/H I have seen in a long time.

Thx for your reply,

Ernst