Can GlaxoSmithKline Continue to Rise?

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With shares of GlaxoSmithKline (NYSE:GSK) trading around $51, is GSK an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework.

T = Trends for a Stock’s Movement

GlaxoSmithKline is global health care group engaged in the discovery, development, manufacturing, and marketing of pharmaceutical products. These products are vaccines, over-the-counter medicines, and health-related consumer products. GlaxoSmithKline’s principal pharmaceutical products are medicines in these areas: respiratory, antivirals, central nervous system, cardiovascular and urogenital, metabolic, antibacterials, oncology and emesis, dermatology, rare diseases, immuno-inflammation, vaccines, and HIV.

GlaxoSmithKline had previously apologized for bribery practices at its Chinese operations and blamed the acts on a few employees in the company’s China business. Now, Chinese state media are saying the practice was orchestrated by the British company and was not the work of a few employees, Reuters reports. Some detained GSK executives in the country said the company set sales goals that would be impossible to fulfill without the use of bribery. So far, GSK officials have not commented on the accusations.

T = Technicals on the Stock Chart Are Mixed

GlaxoSmithKline stock has trended higher in the past several years. However, the stock has been stuck in a range for most of the current year. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, GlaxoSmithKline is trading between its key averages, which signals neutral price action in the near term.

GSK

Source: Thinkorswim

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