Monday, September 23, 2013

5 Biotech Stocks Under $10 on the Move

DELAFIELD, Wis. (Stockpickr) -- At Stockpickr, we track daily portfolios of stocks that are the biggest percentage gainers and the biggest percentage losers.

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Stocks that are making large moves like these are favorites among short-term traders because they can jump into these names and try to capture some of that massive volatility. Stocks that are making big-percentage moves either up or down are usually in play because their sector is becoming attractive or they have a major fundamental catalyst such as a recent earnings release. Sometimes stocks making big moves have been hit with an analyst upgrade or an analyst downgrade.

Regardless of the reason behind it, when a stock makes a large-percentage move, it is often just the start of a new major trend -- a trend that can lead to huge profits. If you time your trade correctly, combining technical indicators with fundamental trends, discipline and sound money management, you will be well on your way to investment success.

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With that in mind, let's take a closer look at a several stocks under $10 that are making large moves to the upside today.

Organovo

Organovo (ONVO) is a three-dimensional biology company focused on delivering breakthrough bioprinting technology and creating tissue on demand for research and medical applications. This stock closed up 8.2% to $6.03 in Thursday's trading session.

Thursday's Range: $5.80-$6.20

52-Week Range: $1.80-$8.50

Thursday's Volume: 5.36 million

Three-Month Average Volume: 2.67 million

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From a technical perspective, ONVO spiked sharply higher here right off its 50-day moving average of $5.80 with heavy upside volume. This move is quickly pushing shares of ONVO within range of triggering a big breakout trade. That trade will hit if ONVO manages to take out some near-term overhead resistance levels at $6.20 to $6.39 with high volume.

Traders should now look for long-biased trades in ONVO as long as it's trending above its 50-day at $5.80 or above $5.50 and then once it sustains a move or close above those breakout levels with volume that hits near or above 2.67 million shares. If that breakout hits soon, then ONVO will set up to re-test or possibly take out its next major overhead resistance levels at $7.50 to its 52-week high at $8.50.

Arca Biopharma

Arca Biopharma (ABIO) is a biopharmaceutical company developing genetically targeted therapies for cardiovascular diseases. This stock closed up 4.3% to $1.45 in Thursday's trading session.

Thursday's Range: $1.37-$1.49

52-Week Range: $1.13-$5.94

Thursday's Volume: 2.08 million

Three-Month Average Volume: 232,217

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From a technical perspective, ABIO ripped higher here right off its 50-day moving average of $1.38 with monster upside volume. This move saw shares of ABIO flirt with a breakout since the stock tested some near-term overhead resistance at $1.45. Shares of ABIO are now trending within range of triggering a big breakout trade. That trade will hit if ABIO manage to take out some near-term overhead resistance levels at $1.50 to $1.52 with high volume.

Traders should now look for long-biased trades in ABIO as long as it's trending above its 50-day at $1.38 or above more near-term support at $1.29 and then once it sustains a move or close above those breakout levels with volume that hits near or above 232,217 shares. If that breakout hits soon, then ABIO will set up to re-test or possibly take out its next major overhead resistance level at $1.65. Any high-volume move above $1.65 will then give ABIO a chance to re-fill some of its previous gap down zone from May that started near $2.80.

Supernus Pharmaceuticals

Supernus Pharmaceuticals (SUPN) is a specialty pharmaceutical company focused on developing and commercializing products for the treatment of central nervous system, or CNS, diseases. This stock closed up 4.3% to $6.87 in Thursday's trading session.

Thursday's Range: $6.55-$6.90

52-Week Range: $4.45-$14.98

Thursday's Volume: 754,000

Three-Month Average Volume: 546,767

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From a technical perspective, SUPN jumped sharply higher here back above both its 200-day moving average of $6.63 and its 50-day moving average of $6.67 with above-average volume. This stock has been trending sideways for the last month, with shares moving between $6.40 on the downside and $7.08 on the upside. This spike on Thursday is now quickly pushing shares of SUPN within range of triggering a big breakout trade above the upper-end of its recent sideways trading chart pattern. That trade will hit if SUPN manages to take out some near-term overhead resistance levels at $7 to $7.08 with high volume.

Traders should now look for long-biased trades in SUPN as long as it's trending above some key near-term support at $6.40 and then once it sustains a move or close above those breakout levels with volume that hits near or above 546,767 shares. If that breakout hits soon, then SUPN will set up to re-test or possibly take out its next major overhead resistance levels at $8.40.

Cerus

Cerus (CERS) is a biomedical products company that focuses on commercializing the Intercept Blood System to enhance blood safety. This stock closed up 2.2% to $5.88 in Thursday's trading session.

Thursday's Range: $5.66-$5.94

52-Week Range: $2.68-$6.00

Thursday's Volume: 512,000

Three-Month Average Volume: 519,862

From a technical perspective, CERS moved modestly higher here right above its 50-day moving average of $5.48 with decent upside volume. This stock has been uptrending strong for the last two months and change, with shares moving higher from its low of $4.16 to its recent high of $6. During that uptrend, shares of CERS have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of CERS within range of triggering a big breakout trade. That trade will hit if CERS manages to take out Thursday's high of $5.94 and then once it clears its 52-week high at $6 with high volume.

Traders should now look for long-biased trades in CERS as long as it's trending above its 50-day at $5.48 and then once it sustains a move or close above those breakout levels with volume that hits near or above 519,862 shares. If that breakout hits soon, then CERS will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $7 or $8.

Transition Therapeutics

Transition Therapeutics (TTHI) is a product-focused biopharmaceutical company, developing therapeutics for disease indications with markets. This stock closed up 3.9% to $4.18 in Thursday's trading session.

Thursday's Range: $3.98-$4.18

52-Week Range: $1.90-$4.99

Thursday's Volume: 76,000

Three-Month Average Volume: 158,130

From a technical perspective, TTHI ripped higher here right off its 50-day moving average of $4.04 with lighter-than-average volume. This stock has been trending sideways inside of a consolidation pattern for the last month and change, with shares moving between $3.93 on the downside and $4.53 on the upside. This pattern has started to coil into a tighter range over the last few weeks, which often signals that a stock is ready to see a sharp move if that range is taken out. Shares of TTHI are now starting to move within range of triggering a major breakout trade above the upper-end of its recent sideways trading chart pattern. That trade will hit if TTHI manages to take out some key overhead resistance levels at $4.31 to $4.53 with high volume.

Traders should now look for long-biased trades in TTHI as long as it's trending above support at $3.93 and then once it sustains a move or close above those breakout levels with volume that hits near or above 158,130 shares. If that breakout hits soon, then TTHI will set up to re-test or possibly take out its 52-week high at $4.99. Any high-volume move above $4.99 will then give TTHI a chance to tag $6 or $7.

To see more stocks that are making notable moves higher today, check out the Stocks Under $10 Moving Higher portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.


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>>5 Stocks Rising on Unusual Volume

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At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including

CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.


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