Another under-$10 stock in the biotechnology and drugs complex that looks ready to trigger a near-term breakout trade is
(NAVB - Get Report)
, which is focused on the development and commercialization of precision diagnostic agents. This stock has soared over 60% in just the last three months.
If you take a look at the chart for Navidea Biopharmaceuticals, you'll see that this stock triggered a major breakout back in late June once it smashed through some previous overhead resistance at $3.47 to 3.55 a share with
monster upside volume
. Following that breakout, shares of NAVB soared to its recent high near $4.45 a share. During that monster run, the upside volume for NAVB has been off the charts for most of June and July. Since hitting that high at $4.45, shares of NAVB have started to move sideways between $4.40 and $4.09 a share. A move outside of that range will now setup the next major trend for NAVB.
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Traders should now look for long-biased trades in NAVB if it can manage to trigger a breakout trade above some near-term overhead resistance at $4.45 a share with high volume. Look for volume off a sustained move or close above $4.45 that registers near or above its three-month average action of 548,951 shares. If that
soon, then NAVB will have a great chance of re-testing and possibly taking out its 2011 high of $5.48 a share.
If you're in the bull camp on NAVB, then one could look to buy this stock off any weakness and simply anticipate the breakout. If you get long off weakness, then use a stop at around $4.09 or even down to $3.80 a share. I would prefer to get long off strength once NAVB takes out $4.45 with high volume. If you get long off strength, then use a stop just below $4.09 a share in case it's not ready to launch just yet.
Make note that the current short interest as a percentage of the float for NAVB is extremely high at 17.4%. This company has a major catalyst on the horizon, since it will meet with the FDA on September 10 for the possible approval of its drug candidate Lymphoseek. This product is used for intraoperative lymphatic mapping. We could easily see NAVB short-squeeze huge right into that PDUFA date, so keep this one on watch.