Relentless Zymeworks stock eyes a breakout from channel. Buyers should keep watch

Zymeworks Inc. (NYSE:ZYME) could be one of the best biotech stocks to buy in November. The stock, which has crashed by 55.71% year-to-date, trades within narrow ranges, but the upside potential is growing. A brief technical outlook shows that ZYME has been within the same zone it was trading in since April 2022. In fact, all the losses in the year happened before April, and the stock has remained stable since then.

While Zymeworks trades at $7.57, it kept off potential acquirers at $10.50 in May this year. By then, the stock was trading at the same level it is today, so not much price movement has happened. Zymeworks said that the offer by All Blue Falcons undervalued the company. The decision underlined the company believes that the stock will grow in value.

A year of missed earnings has been an Achilles heel for Zymeworks. In its last four quarters, the biotech firm has surpassed estimates only once. The last reported quarter saw the company post a loss of $0.97 or £0.86 per share. The loss was wider than the projected $0.93 or £0.83 per share.

However, analysts expect a turnaround when Zymeworks reports Q3 earnings on November 8. The company is expected to lower the loss to $0.94 or £0.84 per share, a year-over-year improvement of 24.8%. Next week, an earnings beat could be the trigger for the stock’s breakout, which is already pushing higher.

ZYME eyes a breakout from a trading channel as 200-day MA joins support

For the first time since January 2021, the 200-day moving average has joined a support for ZYME. The stock trades at the upper end of a horizontal channel. The MACD indicator shows that the bullish momentum is building as the price attempts to break above the channel.

A crucial golden cross could be confirmed if the 50-day MA moves above the 200-day MA. The signal could welcome a lasting bullish trend.

Should you buy Zymeworks now?

If looking at a favourable investing opportunity in November, Zymeworks shares should be on the watchlist. The company is expected to beat earnings estimates next week. Wait for the earnings report to assess a possible breakout before buying the stock.

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