Resistance is Turning Into Support for This Biotech Stock
A lot of eye balls on the health care sector these days, and for good reasons. Traditionally, this has been one of the more defensive sectors, and it seems to be picking up that role at the moment.
On the weekly RRG for US sectors, XLF hooked sharply upward, moving rapidly back into the leading quadrant after having dropped into weakening. If you are set to approach this market from the long side, that means this is one of the sectors to go for stock picking.
Turning to the price chart of VRTX, as shown at the top of this article, reveals that the old resistance level around $195-200 has now turned into support. Since 12 March, that area has been tested numerous times on very volatile trading days, but it was never broken at a closing level.
The more this happens, the stronger the support becomes. Apparently that is an area that attracts buyers.All in all, given the strong rotation of XLF and the strong rotation of VRTX against XLF, it looks like dips into this support range $195-200 are buying opportunities with limited risk, as stops can be put just below this support area.
Julius de Kempenaer
Senior Technical Analyst, StockCharts.com
Creator, Relative Rotation Graphs
Founder, RRG Research
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