Newfound Valor for Valeant

The broad market is drifting higher, once again, in front of a major FOMC event later today, essentially ignoring the initial selloff in the futures markets last night amid swirling political headlines. 

For the most part, we have a familiar group of sectors which seem to be benefitting from rotation, even as some growth monsters like ISRG have cooled off considerably of late. 

However, the action in MoviePass play, HMNY, should serve as a lesson to crypto players that momentum darlings can unravel quickly, compelling us all to always focus on downside risk management of trades.

That said, we also want to be opportunistic. And when we look, for example, as a hated, lagging, long-term drama-filled name like Valeant Pharmaceuticals Intl Inc., below on the weekly timeframe, there is no denying the progress the name has made of late.

Note how VRX saw some stronger buyers (bottom pane) coming in around Halloween. That strength has persisted ever since, with price breaking above $18, the well-defined resistance level highlighted. If VRX can now hold over that level, I would consider a long based on a long-term turnaround thesis. 

Indeed, Bill Ackman capitulating on his VRX stake may very well prove to be the inflection point bottom-fishers for which bottom-fishers had been yearning.