Is Vertex Pharmaceuticals Stock Bound for a Pop?

A shift in the options pits could boost the shares, too

Deputy Editor
Mar 14, 2022 at 2:14 PM
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Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) is up 1.6% at $240.25 at last check. Shares saw a positive post-earnings reaction in late January, and then surged to their highest level since October 2020 in early February. VRTX has pulled back over the past month, however, and is now sitting just below its +10% year-to-date level. There is still reason to believe the stock could tackle its multi-year highs once again, given this recent tumble has placed VRTX near a trendline with historically bullish implications.

Specifically, Vertex Pharmaceuticals stock just came within one standard deviation of its 40-day moving average, after dipping below this trendline in February. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, at least three similar signals have occurred in the past three years. The equity enjoyed a positive return one month later, averaging a 7.2% gain. From its current perch, a comparable move would put VRTX over the $257 mark .

VRTX Chart March 14

A shift in sentiment in the options pits could boost VRTX. The stock's 10-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands higher than 67% of readings in its annual range. This indicates puts have been picked up at a quicker-than-usual pace in the last two weeks.

 

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