Vertex Pharmaceuticals Hits $500 and It Likely Isn't Done Climbing
Here's where where the shares may be headed — and how traders can play it.
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In my February 15 update on Vertex Pharmaceuticals VRTX I wrote that "Traders should hold existing longs and raise sell stops to $395. Add to longs above $430."
With VRTX trading around $500 now a fresh look at the charts looks like a good idea.
In the daily bar chart of VRTX, below, I can see that the shares declined into April and may or may not have stopped out traders (I get the sense that very few traders actually use stop protection). The rally resumed in full force in May. VRTX trades above the rising 50-day and the rising 200-day moving average lines.
The On-Balance-Volume (OBV) line has remained strong since December and confirms and supports the price gains we have seen. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line even after a correction. A turn higher in the MACD oscillator is probably the next move for this indicator.
In the weekly Japanese candlestick chart of VRTX, below, I can see a long and strong advance. The shares trade above the rising 40-week moving average line.
The weekly OBV line and the MACD oscillator are both positive. The most recent candle could be a spinning top but it may not become a top reversal if this week's candle is white (bullish).
In this daily Point and Figure chart of VRTX, below, I can see that the software is projecting a price target in the $587 area.
In this weekly Point and Figure chart of VRTX, below, I can see the same $587 price target as the daily chart above.
Bottom-line strategy: Traders who are still long VRTX should continue to hold those positions. Raise stops to $465 (if you use stops). The $587 area is my price target for now.
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