Teva Pharmaceutical Industries Limited (TEVA) shares rose more than 11% over the past two days after the company announced a new restructuring plan. Under the new plan, the company will reduce its total cost base by $3 billion by the end of 2019, reduce its workforce by 25% and suspend its dividend on ordinary shares and American Depository Shares (ADSs). The goal is to improve business performance, profitability, cash flow generation and productivity over the long term.

While the stock soared higher, sell-side analysts have had mixed opinions on Teva's plan. Wells Fargo called the cost-cutting plan the "proper move" but noted that it strips the business and reiterated its Market Perform rating and $12.00 per share price target. Cowen & Co. noted that the reductions would further cut revenue over the coming years but reiterated its Market Perform rating and $18.00 per share price target. (See also: Teva Stock Jumps After New CEO Is Named.)

Technical chart showing the performance of Teva Pharmaceutical Industries Limited (TEVA) stock

From a technical standpoint, the stock broke out from trendline and R1 resistance at around $16.38 to R2 resistance at $17.94 earlier this week. The relative strength index (RSI) appears overbought at 72.04, but the moving average convergence divergence (MACD) remains in a bullish uptrend after crossing over in mid-November. Traders should maintain a short-term bullish bias on the stock following its rally since early November.

Traders should watch for some consolidation above trendline support at around $16.38 over the coming sessions given the overbought RSI reading. If the stock continues its move higher, the next major resistance is the 200-day moving average at $23.75. A breakdown from trendline support could lead to a move down to the 50-day moving average at $14.18 over the coming weeks, but this appears to be a less likely scenario. (For more, see: Will Teva Pharmaceutical Stock Close the Gap?)

Chart courtesy of The author holds no position in the stock(s) mentioned except through passively managed index funds.