A Technical Turnaround Play (WBA, UTX)
Walgreens Boots Alliance Inc. (WBA)
Walgreens Boots Alliance generates about 75% of revenue from its Pharmacy USA division. WBA has over 14,000 stores in 11 countries, including 9,560 in the U.S. and 4,767 in the UK and internationally, under the Walgreen, Duane Reade and Boots names. WBA owns 27% of AmerisourceBergen.
WBA is a technical turnaround play as the shares have fallen from $86 in December to an August low of $49. Since the beginning of April, following most of the price damage, the stock has traded sideways as downside momentum has abated. An attempted breakout in September on a big pickup in volume failed as it closed a gap and approached the 200-day average (currently $57). WBA then pulled back to its 50-day and bullishly held. Since October 9, the stock has rebounded once again. If it can clear its 200-day and the recent high at $58, the shares have room to run well into the $60's.
We would put a stop-loss just under support at $51.50. We would take profits in the low-$60's region should the recent high of $58 give way.
United Technologies Corp. (UTX)
United Technologies is an industrial conglomerate with a wide range of businesses. We think the company, which soon will be split into three separate companies, should continue to benefit over the long-term from population growth and the expansion of the middle class in developing markets.
UTX has traded sideways for much of the year, between $122 and $144. Early this month, the stock put in a higher low. If it can take out the most-recent high at $139, we could see a run at the all-time highs at $144, hit in May 2019 and September 2018. An upside break of $144 could be very bullish as it would complete a very large inverse head-and-shoulders formation that started in January 2018. According to Investors.com, UTX has high Composite, Relative Strength (RS), and Accumulation/Distribution ratings.
We would put a stop-loss just below support of $129. We would take profits in the $150 to $160 range if the all-time high of $144 becomes a thing of the past.
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