NEW DIRECTIONAL CALL PLAYS

Teva Pharmaceuticals - TEVA - close 55.68 change +1.09 stop 52.95

Company Description:
Teva Pharmaceutical Industries Limited (Teva) is a global pharmaceutical company that develops, produces and markets generic drugs covering all treatment categories. The Company has a pharmaceutical business, whose principal products are Copaxone for multiple sclerosis and Azilect for Parkinson’s disease, respiratory products and women’s health products. Teva’s active pharmaceutical ingredient (API) business provides vertical integration to Teva's own pharmaceutical production. The Company's global operations are conducted in North America, Europe, Latin America, Asia and Israel. Teva has operations in more than 60 countries, including 38 finished dosage pharmaceutical manufacturing sites in 17 countries, 15 generic research and development (R&D) centers operating mostly within certain manufacturing sites and 21 API manufacturing sites around the world. On January 29, 2009, the Company sold its Israeli animal health product line to Phibro Animal Health Corporation. (source: company press release or website)

Target(s): 56.44, 57.95
Key Support Areas: 54.25, 53.21
Key Resistance Areas: 56.44, 58.00
Time Frame: 1 to 2 weeks

Why We Like It:
TEVA has found an upward trend line dating back to October 2008 and a prior resistance level which should now act as support, both in the $54 to $55 price range. The market is oversold and I'm expecting a bounce from here. I've listed 2 possible entry points: the first is near today's lows at $54.80 and the second is near the low from 5/19 at $54.25. If TEVA can retrace some of today's gains it could form a bullish inverse head and shoulders pattern on its intraday charts. This may act as a catalyst for TEVA to move higher in the coming days. The futures are down in the after market as I write this so the entry point will need to be determined by the early price action tomorrow. Our initial stop will be $52.95.

Suggested Position: June $55.00 CALL if TEVA trades down near $54.80 or $54.25, current ask $2.17, estimated ask at entry $1.50

Annotated Chart:

Entry on May xx
Earnings Date: More than 2 months (unconfirmed)
Average Daily Volume: 3.7 million
Listed on 5/24/10