The performance of Pfizer Inc. (PFE) does little to inspire confidence in investors. However, for traders it’s an entirely different story. The recent downtrend in the stock’s performance is notable, and after multiple successive sessions of declines, traders will be eyeing the dollar signs with put options. The stock is currently trading at $31 per share, down 1.46% or $0.46. The above graphic reflects the clear bearish momentum in the trend, which is now well below the 50-day moving average price of $32.24 per share and the 200-day moving average price of $33.27 per share. This begs the question: Why is Pfizer stock on a downtrend?

Reason #1 Q3 performance of PFE stock fell shy of expectations

While it is certainly not news, Q3 2016 performance figures from PFE stock were hardly a reason to celebrate. The company generated revenues of $13 billion, which comprises 10% operational growth for Pfizer Incorporated. Pfizer Standalone – which excludes Legacy Hospira generated revenues of $11.9 billion which amounted to 3% operational growth. The diluted earnings per share of the company was $0.21, and the adjusted diluted earnings per share were reported at $0.61. Revenues between Q3 2015 and Q3 2016 increased by 8% but reported net income decreased by 38% while reported diluted earnings per share decreased by 37%. Clearly, this was the reason why the stock dropped after the Q3 reports in 2016. Pfizer Standalone revenues were up 1% between Q3 2015 and Q3 2016. Essential Health was up 7% in the same period, while innovative health was up 9%.

What is going on with Health Care Stocks and PFE in Particular?

If we turn our attention to the earnings surprise history of PFE stock, some interesting trends are apparent.

• On February 2, 2016, Pfizer generated 1.92% earnings surprise
• On May 3, 2016, Pfizer generated a 21.82% earnings surprise
• On August 2, 2016, Pfizer generated a 3.23% earnings surprise
• On November 1, 2016, Pfizer generated a -1.61% earnings surprise

The latter entry is the one that most affects trading activity. If a pharmaceutical company is struggling, and the trend in the industry is bearish this is going to adversely affect sentiment. It should be pointed out that the Health Care sector exchange traded fund has now plunged for the sixth successive trading day. This marks the longest losing streak for the ETF in 16 months. SPDR Health Care Select Sector is currently down 0.9% percent, tracking losses for 6 days on the trot. The reason we are seeing such bearish sentiment with the health care sector is clear: Donald Trump is preparing to gut Obamacare. He ran his election campaign on repealing and replacing the failed experiment known as Obamacare, what with astronomical costs, decreasing coverage, and increasing deductibles.

Binary Options Traders Should Carefully Follow This News Release

The SPDR Health Care Select Sector exchange traded fund goes by the ticker XLV. It is down 2.9% in its current multi-day losing streak, and has gained just 1.2% since the November 8 presidential election. The companies that are really taking a hit in the healthcare sector include Johnson & Johnson (JNJ), down 1.70% with decreased guidance. Pfizer is right up there with J&J, struggling to make headway. The stock joins industry heavyweight Merck & Company Incorporated (MRK) which is also down 1.39%. On Tuesday, 31 January 2017, Pfizer Inc. will be releasing Q4 results.

It’s also the same day that Eli Lilly & company (LLY) will be releasing their quarterly earnings reports. Analysts are anticipating Q4 2016 earnings of $0.50 per share, with attendant revenues of $13.499 billion. More importantly, shareholders are interested in how Pfizer Inc. plans to grow the company, increase its EPS and generate higher revenues in 2017. Look out for USD strength, because a lot of the revenues generated by Pfizer Inc. come from abroad. During Q1 – Q3 2016, $39.1 billion of revenues were generated by Pfizer, with approximately $20 billion coming from Europe, emerging markets, and the rest of the developed world.

Dollar weakness will generate higher income streams in USD (when foreign earnings are repatriated into the USD). Much the same is true is happening in Britain with companies on the FTSE 100 index. So to be clear, USD weakness will benefit Pfizer Inc. in USD terms.