How Far Can Vertex Pharmaceuticals Rally?

Let's check the charts for the answer.

Vertex Pharmaceuticals (VRTX) posted strong earnings numbers last week but the stock has been strong since bottoming out in October-November. Let's check on the indicators to see if this strength can continue.

In our Dec. 17 review we wrote that "VRTX has broken a long-term downtrend so it has gotten my attention. A buy recommendation last month would have been great but I still find the long side of VRTX attractive. Traders could buy a shallow dip on VRTX risking to $202. The $280-$294 area is our price target for now."

In the updated daily bar chart of VRTX, below, we can see that the shares have climbed strongly and have yet to reach our target area. Prices are trading above the rising 50-day moving average line as well as the bullish 200-day line. We can see a bullish golden cross of these two averages at the beginning of January.

The On-Balance-Volume (OBV) shows strength from early December and helps to confirm the price gains so far. The Moving Average Convergence Divergence (MACD) oscillator just crossed to the upside for a fresh outright buy signal. 

 

In the weekly Japanese candlestick chart of VRTX, below, we see a positive picture. Prices are in an uptrend and trade above the rising 40-week moving average line.

 

The weekly OBV line shows strength the past four months. The MACD oscillator is bullish. 

 

 

 

In this daily Point and Figure chart of VRTX, below, we can see a potential price target of $307. 

 

 

In this second Point and Figure chart of VRTX, below, we used weekly price data with a five-box reversal filter. This projects a target in the $495 area. 

 

 

Bottom-line strategy: The charts of VRTX are bullish. Traders should raise stops to $220 from $202. Our targets are the $280-$294 area followed by $307 for now.

 

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