One name under-$10 name in the biotechnology and drugs complex that's worth watching here is
, which is engaged in the discovery and development of drugs for the treatment of human viral diseases with operations in the U.S. and Europe. This stock has been blazing a trail to the upside in 2011, with shares up over 40%.
If you take a look at the chart for Idenix Pharmaceuticals, you'll notice that this stock plunged from its July high of $7.03 to a recent low of 4.06 a share. After tagging that low, the stock then ran up to $6.20 and formed a double top. Shares subsequently plunged back down to $4.30. Since hitting $4.30 in October, the stock has started to form a more bullish pattern with shares making higher highs and higher lows. The stock now sets up for a major breakout if it can sustain a move and close above some near-term overhead resistance levels.
Market players should watch for IDIX to clear $7.16 to $7.60 (Thursday's high) on high volume. Traders should look for volume that's tracking in close to or above its three-month average action of 646,500 shares. Volume on Thursday hit about 1.2 million shares, with the stock finishing up 2.7% to $7.18. That means the first breakout level has hit and now all this stock needs to do is close over $7.60 with solid volume.
You could be a buyer of this stock off any noticeable weakness and simply use a mental stop near Thursday's low of $6.96. If you want to buy off strength, then buy some shares once it takes out $7.60 on high volume. A close over $7.60 should set this stock up to trend back towards its next significant resistance level at $10 a share, or possibly even higher.
Idenix, a stock in
Seth Klarman's portoflio
, shows up on a list of
13 Biotech Stocks Bought and Sold by Hedge Funds
in the most recently reported quarter.