LON:VER currently trading at 19.672
Vernalis Plc has stayed on THE STOP HUNTER weekly Traders Club report now since Sep’16, making it one of the longest running ‘short’ stock ideas we’ve had over the last year. In that time it has produced over 100% return and just wont drop off! It is a good example to compliment my blog series on Technical Analysis as to how you can put the fundamentals and technicals together to make a solid trading strategy.
Fundamentally the outlook for the stock remains poor. On Stockopedia it holds just a StockRank of 1 and trades in the biotechnology / medical research sector that has also been under performing.
Technically the stock looks dire. It hit the radar last Sept as it broke through the Ichimoku cloud, backed up by various indicators. Trailing the stock down using a predefined technical analysis stop loss strategy / trade management strategy has kept the trade alive to generate the substantial gains. There have been various ‘sell in’ opportunities to take advantage of the continuing downward momentum.
Technically you would not favour the long side going forward. It would take a major fundamental event to turn the outlook on LON:VER bullish once more.
Short / Medium term technical levels (based off daily chart Fibonacci & Ichimoku levels):