VRTX closes below its opening price unable to hold early session gains
Vertex Pharmaceuticals Incorporated (VRTX) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving higher for the 4th day in a row, VRTX finished Wednesday at 267.55 edging higher $0.70 (0.26%), significantly outperforming the Nasdaq 100 (-1.67%). Trading $2.55 higher after the open, the stock was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on September 8th, VRTX actually gained 1.71% on the following trading day. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (VRTX as at Sep 16, 2020):
Wednesday's trading range has been $6.24 (2.3%), that's slightly below the last trading month's daily average range of $7.12. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for VRTX.
Two candlestick patterns are matching today's price action, the Bearish Hikkake Pattern and the Black Candle which are both known as bearish patterns.
Prices are trading close to the key technical support level at 263.47 (S1). Unable to break through the key technical resistance level at 273.11 (R1), Vertex Pharmaceuticals closed below it after spiking up to 273.55 earlier during the day. The failure to close above the resistance could increase that levels significance going forward.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Black Candle" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Vertex Pharmaceuticals. Out of 564 times, VRTX closed higher 54.26% 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 58.51% with an average market move of 2.04%.