VRTX closes above its opening price after recovering from early selling pressure
Vertex Pharmaceuticals Incorporated (VRTX) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, VRTX ended the week -1.29% lower at 284.96 after gaining $0.33 (0.12%) today on low volume, slightly underperforming the Nasdaq 100 (0.38%) ahead of tomorrow's Memorial Day market holiday. Trading up to $2.66 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (VRTX as at May 22, 2020):
Friday's trading range has been $4.48 (1.58%), that's far below the last trading month's daily average range of $9.91. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for VRTX. Prices continued to consolidate within a tight trading range between 281.25 and 286.00 where it has been caught now for the last three trading days.
Two candlestick patterns are matching today's price action, the Bullish Spinning Top which is known as bullish pattern and one bearish pattern, the Hanging Man. The last time a Bullish Spinning Top showed up on April 20th, VRTX actually lost -3.83% on the following trading day.
Prices are trading close to the key technical resistance level at 288.52 (R1). The stock was bought again around 281.52 after having seen lows at 281.25, 282.13 and 281.14 in the last three trading sessions. Obviously there is something going on at that level.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling could speed up should prices move below the nearby swing low at 281.25 where further sell stops might get activated.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to prior three Lows" stand out. Its common bullish interpretation has been confirmed for Vertex Pharmaceuticals. Out of 32 times, VRTX closed higher 59.38% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 75.00% with an average market move of 5.69%.