BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) — This week, I plan to cover pharmaceutical and tech stocks that are technically favorable, starting with BMRN stock.
BioMarin Pharmaceutical specializes in drugs for serious, rare disorders that have not yet been addressed by other manufacturers.
S&P Capital IQ Equity Research projects sales will increase 23.6% this year to $1.1 billion. While its analysts estimate the company will post a loss of 52 cents per share for 2016, BioMarin is expected to report operating EPS of 42 cents in 2017.
Despite the FDA’s rejection of one of BioMarin’s drugs in January, which sparked a sell-off in BMRN stock, Capital IQ has a positive outlook on the company’s drug portfolio after positive data on drugs used to treat children with a fatal neurodegenerative disease and adults with inadequately controlled blood Phe levels. Capital IQ rates BMRN stock a “Buy” with a 12-month price target of $125.
Turning to the chart, we see that BMRN stock dropped from around $110 in late 2015, which was due in part to the FDA rejection. But prior to establishing a bottom below $70 in early 2016, the stock flashed three buy signals from my proprietary internal indicator, the Collins-Bollinger Reversal (CBR), and rallied to its downtrend line.
BMRN stock broke from that resistance line in April and consolidated around its 50-day moving average until early this month, when it executed a triple-top breakout through its 50-day and 200-day moving averages on high volume.
Traders should look to buy BMRN stock at $94 or lower for a target of $120 by December, which would result in a gain of more than 25%. Investors who seek speculative purchases that could deliver long-term, high-percentage returns should also consider purchasing this stock at the market price as a cornerstone holding in their biotech portfolio.