This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

5 Stocks Setting Up to Break Out

Achillion Pharmaceuticals

Another stock that's trading within range of a breakout trade is major drugs player Achillion Pharmaceuticals (ACHN), 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 high volume. 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 moving average 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.
3 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
CIGX $0.00 0.00%
ACHN $8.66 0.87%
BRLI $43.00 3.00%
CRAY $27.86 -0.68%
LMOS $14.50 -0.68%

Markets

DOW 17,658.99 -71.12 -0.40%
S&P 500 2,067.13 -9.65 -0.46%
NASDAQ 4,987.84 -21.3740 -0.43%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs