MYGN Myriad Genetics Inc

Make no mistake about it, Biotech has been hot. More specifically, the Biomedical/Genetics industry is in the top 32% of our Zacks Industry Rank. The industry has 38 stocks that are Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy). Among the top ranked stocks in this highly ranked industry is our Bull of the Day, Myriad Genetics (MYGN).

Myriad is a Zacks Rank #1 (Strong Buy) with earnings coming up after the close on May 6^th. Myriad uses a gene-based medicine to develop therapeutic and molecular diagnostic products. Think medicine that is programmed specifically to your personal gene mix. That's what the long term goal is of Myriad. MYGN hopes that gene-specific medication will lead to more effective treatment of illness and disease.

The more you think about potential of these drugs the more excited you get about the stock. But this company is much more than just the story. MYGN has the numbers behind it as well. Not only has the company surprised earnings to the upside four quarters in a row, it’s also had substantial upside revisions over the last 90 days. Current year consensus has risen from $1.98 to $2.21 and next year’s numbers have risen from $1.71 to $1.92.

So the fundamental story is there, the feel good story is there, now what about the technical picture? I’m just as confident. Since late last year, MYGN has been locked in an upward trajectory. The stock has had a few pullbacks to support which served as temporary rest along the lines of a longer term bull run. The first major resistance MYGN ran into was just above the $38 level in late February and early March. Following the resistance, MYGN pulled all the way back to $32, below its 25 day moving average shifted by 5 days (25x5).

For a few days it looked as if Myriad had run out of gas. But in late March we caught a bid on confirmed strength out an oversold stochastic coupled with a bullish cross. The last run of strength took us all the way up to $42 before a recent sell-off put us on the North side of $38.

It’s this $38 level that is most important for MYGN and the reason why I’m bullish on it today. You have a few very positive technical developments. First, $38 had been resistance in the past prior to being broken by the gap up in early April. What was once a ceiling now becomes a floor to support the stock. So you have a stock that has been higher, pulled back, is still above support and above its 25x5.

One worry I have from a technical aspect is that the slope of the 25x5 is essential zero right now which lends itself to a range bound stock. Settling into a range wouldn’t be the worst thing in the world as the top of the range looks to be $42 for a stock in the $38 handle. Ten percent upside potential without a breakout versus a downside at about $36 gives a good risk versus reward scenario. Earnings around the corner are a wildcard and I’d avoid having unidirectional exposure ahead of the report. Those looking to roll the dice on a breakout can use options as MYGN is optionable.

Myriad Genetics (NASDAQ:MYGN)
Historical Stock Chart
From Mar 2024 to Apr 2024

Myriad Genetics (NASDAQ:MYGN)
Historical Stock Chart
From Apr 2023 to Apr 2024