The market reacted harshly to Teva Pharmaceutical Industries Ltd.'s disappointing first quarter results, handing the stock its biggest one-day loss in more than eight years, though analysts remained largely optimistic. As the dust settled Thursday, analysts issued their revised forecasts for the generic drug maker's shares and the general feeling was that the sell-off was unfairly exaggerated. "Wednesday's decline in share price was an overreaction, given that we still have comfort in Teva's long-term business model," said Piper Jaffray analyst Deborah A. Knobelman, in a note to clients. She went on to add that the stock has more than 10% upside from current levels in order to bring Teva's valuation in line with its peers, and that the firm, therefore, maintained its "outperform" rating on the stock. Meanwhile, Chicago-based firm William Blair & Co. highlighted the strength of Teva's management as reason to continue to recommend share purchase. "We view the share price after today's [Wednesday's] correction as a reasonable-to-attractive entry point," the Blair analysts said in their research note. On Wednesday, Teva shares fell 8.6% to NIS 175.10 in Israel while the ADRs closed down 12.4% at $37.56 in New York after the company reported earnings per share of $0.37, well below consensus estimates of $0.41, and issued cautious guidance for 2006. Despite the optimism of the fundamental analysts, from a technical standpoint, the breach of support at $39 does not bode well for the Teva share price in the short-term. Although a "dead cat bounce" (a term used to describe a pattern wherein a sharp rise in the price of a stock follows a spectacular fall) is possible, the stock appears to be in freefall, with no support visible until it reaches $34 as Wednesday's sharp fall saw Teva crash through two support levels - the first at $40 and then through $39. "We would be unlikely to be buyers of the stock at current levels - especially while the news is still being digested by fundamental analysts," said London-based trader Oli Greenspan, of Hamilton Court Capital. According to the charts, there may be a brief period of respite after two days of heavy losses, but - unless the shares consolidate above $39, the near-term outlook for the shares appears negative on a technical basis.