Another stock that's trading within range of a breakout trade is major drugs player
, a biopharmaceutical company focused on the discovery, development and commercialization of treatments for infectious diseases. This stock is off to slow start in 2012, with shares off by around 13%.
If you take a look at the chart for Achillion Pharmaceuticals, you'll notice that this stock has been downtrending for the past six months, with shares dropping from a high of $12.46 to a recent low of $5.78 a share. During that move lower, shares of Achillion Pharmaceuticals have mostly made lower highs and lower lows, which is bearish technical price action. That said, during the last month and change, this stock has found buying interest near $6 a share and selling resistance near $7.60 a share.
>>22 Biopharma Stocks With Breakout Potential in 2012
Market players should now look for long-biased traders in ACHN if it can manage to trigger a near-term breakout above some overhead resistance at $6.89 to $7.75 a share with
. Look for a sustained move or close above those levels with volume that registers close to or above its three-month average action of 1.1 million shares. If we get that action soon, then ACHN will be trading back above both its 50-day
at $7.33, and its 200-day moving average at $7.75 a share. That action would give this stock a chance to trade towards $9.50 to $11 a share.
I would look to play ACHN off strength and get long once it takes out $6.89 with volume, and then add above $7.75 a share. One could use a stop near $6 a share. You could also buy off weakness near $6 and simply anticipate the breakout with a stop just a few percentage points below that level.