On Monday Vertex Pharmaceuticals ( VRTX) reported an earnings and revenue beat and share prices advanced. The company also retained its full-year outlook which helped to push the stock higher.
In my February 4 review of VRTX I wrote that "... the charts suggest that some price weakness could unfold." Prices did weaken into March and then things shifted again.
Let's see what's going on.
In the daily bar chart of VRTX, below, I can see that the shares have staged an impressive rally from early March. VRTX has rallied back above the rising 50-day moving average line and above the rising 200-day moving average line.
The math-driven On-Balance-Volume line has risen to confirm the price gains as buyers of VRTX have been acting more aggressively than sellers. Heavier trading volume has been seen on days when the stock has closed higher. The Moving Average Convergence Divergence (MACD) oscillator is in a bullish alignment above the zero line.
In the weekly Japanese candlestick chart of VRTX, below, I see a mostly bullish picture. The most recent candlestick bar shows an upper shadow telling me that traders are starting to reject the highs. A close above the upper shadow will refresh the uptrend.
The weekly OBV line and the MACD oscillator are bullish.
In this daily Point and Figure chart of VRTX, below, I can see that the software is projecting a possible $443 price target.
In this second Point and Figure chart of VRTX, below, I used weekly price data and here a target of $491 is projected.
Bottom-line strategy: Traders and investors who are long VRTX should continue to hold those positions. The charts and indicators suggest higher prices are possible in the weeks and months ahead.
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These recently downgraded names are displaying both quantitative and technical deterioration.
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