EarningsBeats.com Digest for August 28, 2020
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Combining a 20 day EMA breakout with a Strong AD Line
I've discussed biotechs in my Trading Places blog, EarningsBeats.com's Daily Market Report, and on my Trading Places shows. I'm not ready to give up on the group, although admittedly they have been lagging pretty badly over the past several weeks. The bullish argument, however, is that they're just now testing their rising 20 week EMA, which can be a launching point for another rally. Time will tell if that's what will happen with the biotechs
now. Meanwhile, there are recent leaders in the industry group that bear watching. One of those is Vertex Pharmaceuticals (VRTX):
The blue circle highlights VRTX climbing back above its 20 day EMA - which it's been trading beneath for weeks - and it never really lost any strength in its AD line. That combination would suggest VRTX is a likely beneficiary if the group, as a whole, bounces off its rising 20 week EMA and begins to rally into the end of August and throughout September. Should biotechs fail to hang onto that 20 week EMA, and VRTX loses support at its recent price
low, then all bets are off. I like the chances of the stock and the group, however.
Happy trading!
Tom Bowley
Chief Market Strategist
EarningsBeats.com
Better Timing. Better Trades.
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