I haven't exactly been a friend to Philip Morris (PM) in the past as I've found the stock to be ridiculously expensive against long term fundamentals that I don't find appealing. However, the stock has seen an enormous rally this year so surely the bulls have won the day. The thing is that after a weak Q3 report,the stock is showing even more signs that $121 was the top and that a downtrend has well and truly taken hold. For those reasons, I'm still quite bearish on PM here.
My primary concern - other than long term demand issues - is the chart. PM has been very weak since it hit its high at $121 back in June and a triple top formed. PM hit this area three times in the span of just a few weeks and each time it hit a proverbial brick wall. That was that and since then, the stock has failed to make a new relative high. In fact, each high has been lower and so have the lows, which is the very definition of a downtrend.
