This Stock Will Skyrocket As The Sector Breaks Out

Biotech is breaking out. About 2 weeks ago, I was a little early in highlighting this potential in the IBB ETF, and now it’s happening.

Today I have a stock that will likely have a bigger move than IBB

The breakout in the biotech sector is just getting started. It’s not even gathered any momentum quite yet.

In fact, you might argue that this call is too early.

This is true for today’s stock, which has not broken out yet. However, I’m highlighting Vertex Pharmaceuticals (VRTX) so you can be ready ahead of time.

The reason I’m focusing your attention to VRTX is because if you look at the long-term chart below you’ll notice that there are 3 important support/resistance levels.

  1. $180 which is the support the recent correct bottomed on.
  2. $190 which is the resistance that has held back any rally since its all-time high.
  3. Its all-time high of $196.

If VRTX can close over $190 its likely to test $196, and if the sector as measured by IBB, is still over its 200-day moving average then it’s likely that VRTX will break $196.

Rather than waiting to see if $196 gets broken, I’d rather be in closer to $191!

In summary, the trade setup is to wait for a close over $190 to enter, at which point the best stop is under $178.

A $12 – $14 stop may seem large, but it is not when you consider that VRTX can move over $12 on an average day.

If we use the last 6-month consolidation range to estimate the potential size of the next major up trend it is about $50 on top of $196.

So for the patient trader who catches a breakout in VRTX over $196, a good target would be $250.

Trade smart,

Rick Nartarian, Chief Investment Officer
The American Investor Daily