Another name under-$10 name in the biotechnology and drugs complex that looks poised for much higher prices is Raptor Pharmaceutical (RPTP). Raptor's product portfolio includes both candidates from its drug targeting platforms and in-licensed and acquired product candidates. This stock is off to a decent start in 2012 with shares up over 6.5% so far.
If you take a look at the chart for Raptor Pharmaceutical, you'll see that this stock has been uptrending very strong since it marked a recent bottom at $3.66 a share last August. During that uptrend, RPTP has been consistently making higher lows and higher highs, which is bullish price action. Whenever any stock shows a pattern like this, it demonstrates that large institutional traders are paying up to own the stock whenever it dips.
Market players should now watch RPTP for a breakout trade trigger above $6.44 and then $7.06 on high-volume. At last check, RPTP has already taken out that overhead resistance level of $6.44 today and the volume on this move is very strong. Over 865,000 shares have traded so far, which is well above the three-month average volume of 435,653 shares.Traders should now look for long biased trades in RPTP since the first breakout level over $6.44 a share has hit. One could be a buyer off any future weakness and simply use a mental stop right below some near-term support at $6.25 or down to $6 if you want to give it more room. I would then add aggressively to any long positions if $7.06 is taken out with volume. A high-volume move over $7.06 could lead to huge spike higher in this stock. Shares of RPTP sport a decent short interest since over 9% of the tradable float is currently sold short by the bears. The short-sellers have also been increasing their bets from the last reporting period by 5.4%, or by about 234,000 shares. Those short-sellers will not be feeling very comfortable if RPTP takes out $7.06 soon, so look to squeeze them if that level is breached with volume.
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