NASDAQ:VRTX may be ready to breakout.

VERTEX PHARMACEUTICALS INC (NASDAQ:VRTX) was identified as a Technical Breakout Setup Pattern by our stockscreener. Such a pattern occurs when we see a pause in a strong uptrend: after a strong rise the stock is consolidating a bit and at some point the trend may be continued. Whether this actually happens can not be predicted of course, but it may be a good idea to keep and eye on NASDAQ:VRTX.

What is the technical picture of NASDAQ:VRTX telling us.

ChartMill assigns a Technical Rating to every stock. This score ranges from 0 to 10 and is updated daily. The score is determined by evaluating multiple technical indicators and properties.

Taking everything into account, VRTX scores 9 out of 10 in our technical rating. This is due to a consistent performance in both the short and longer term time frames. Also compared to the overall market, VRTX is showing a nice and steady performance.

• Both the short term and long term trends are positive. This is a very positive sign.
• When comparing the yearly performance of all stocks, we notice that VRTX is one of the better performing stocks in the market, outperforming 97% of all stocks. We also observe that the gains produced by VRTX over the past year are nicely spread over this period.
• VRTX is one of the better performing stocks in the Biotechnology industry, it outperforms 94% of 635 stocks in the same industry.
• VRTX is currently trading near its 52 week high. This is a good sign, definitely because the S&P500 Index is trading in the lower area of its yearly range.
• In the last month VRTX has a been trading in the 276.57 - 299.59 range, which is quite wide. It is currently trading near the high of this range.
• Prices have been rising strongly lately, it may be a good idea to wait for a consolidation or pullback before considering an entry.

Looking at the Setup

Next to the Technical Rating, the Setup Rating of a stock determines to which extend the stock is consolidating. This score also ranges from 0 to 10 and is updated daily. The setup score evaluates various short term technical indicators. For NASDAQ:VRTX this score is currently 8:

Besides having an excellent technical rating, VRTX also presents a decent setup pattern. We see reduced volatility while prices have been consolidating in the most recent period. There is very little resistance above the current price. There is a support zone below the current price at 287.58, a Stop Loss order could be placed below this zone. Very recently a Pocket Pivot signal was observed. This is another positive sign.

Trading breakout setups.

One way to play this would be to wait for the actual breakout to happen and buy when the stock breaks out above the current consolidation zone. A possible place for a stop loss would be below this zone.

Of course, there are many ways to trade or not trade NASDAQ:VRTX and this article should in no way be interpreted as trading advice. The article is purely based on an automated technical analysis and just points out the technical observations. Always make your own analysis and trade at your own responsibility.

Every day, new breakout setups can be found on ChartMill in our Breakout analyzer.