A few days ago, we took a look at some of the larger pharmaceutical companies that had begun to pullback in bull market territory (see "3 Drug Stocks for Active Investors"). In today's column, we turn to the retail end of the business.
First up is Caremark CVS (NYSE: CVS), which has been trading in oversold territory for the past two days after pulling back from new, 52-week highs days ago. Trading off its lowest levels on Friday, the stock is still at significant, short-term closing lows despite finishing fractionally higher over the past two sessions.
CVS has a 7 out of 10 rating, putting the stock at the upper boundary of the neutral range, but a very modest positive edge ahead of trading on Monday. This, and the stock's proximity to longer-term highs, suggest that CVS may have further to fall before becoming attractive enough to lure buyers into being more aggressive than they have been in recent days.
Almost in another world entirely - at least in terms of the stock - is CVS rival, Walgreen (NYSE: WAG). Shares of Walgreen have been toiling away below the 200-day moving average for months, ever since slipping into bear market territory in the summer of 2011. Rangebound since October, WAG most recently attempted to breakout above that range earlier this week. However consecutive overbought closes brought out the sellers, and the stock instead sold off into the weekend.
The true gem among the drug store stocks over the next few days may instead be GNC Holdings (NYSE: GNC). Having rallied to new, 52-week high highs a week ago, shares of GNC have been experiencing aggressive profit-taking that has sent the stock lower by more than 10% over the past four days.
Heading into trading on Friday, GNC is set to open with a positive edge in the short-term of three quarters of a percent.
And although trading at less than $2 per share, shares of RiteAid (NYSE: RAD) are worth noting if for no other reason than the fact that they are trading at near, 52-week highs after climbing back into bull market territory in early November. Up four out of the past six sessions, RAD has a neutral rating of 4 out of 10, and could see a significant ratings downgrade to our "consider avoiding" territory if the stock continues to press toward overbought levels.
Be sure to read our latest column from 7 Stocks You Need to Know: Marvell Makes Good: Nearly 9% in Less Than a Week.
David Penn is Editor in Chief of TradingMarkets.com.
