Good technical signals and a possible breakout for VERTEX PHARMACEUTICALS INC.

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 proprietary Technical Rating to each stock. The score is computed daily by evaluating various technical indicators and properties. The score ranges from 0 to 10.

Taking everything into account, VRTX scores 9 out of 10 in our technical rating. Both in the recent history as in the last year, VRTX has proven to be a steady performer, scoring decent points in every aspect analyzed.

• Both the short term and long term trends are positive. This is a very positive sign.
• Looking at the yearly performance, VRTX did better than 97% of all other 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 95% of 637 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 - 304.26 range, which is quite wide. It is currently trading in the middle of this range, so some resistance may be found above.

Why is NASDAQ:VRTX a setup?

Besides the Technical Rating, ChartMill also assign a Setup Rating to every stock. This setup score also ranges from 0 to 10 and determines to which extend the stock is consolidating. This is achieved by evaluating multiple short term technical indicators. NASDAQ:VRTX currently has a 8 as setup rating:

VRTX has an excellent technical rating and also presents a decent setup pattern. Prices have been consolidating lately and the volatility has been reduced. A pullback is taking place, which may present a nice opportunity for an entry. There is a support zone below the current price at 289.5, a Stop Loss order could be placed below this zone.

How to trade NASDAQ:VRTX?

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.

This article should in no way be interpreted as trading advice. You should always make your own analysis and trade or not trade based on your own observations and style. The article is based purely on some technical observations.

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