This Day On The Street
Continue to site
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 Biotech Stocks Under $10 Set to Soar

Halozyme Therapeutics

One more under-$10 biotech stock that looks ready to trigger a major breakout trade is Halozyme Therapeutics (HALO - Get Report), a biopharmaceutical company whose research focuses on human enzymes that transiently modify tissue under the skin to facilitate injection of other therapies or correct diseased tissue structures for clinical benefits. This stock is virtually flat so far in 2012, with shares off by around 1.5%.

If you take a look at the chart for Halozyme Therapeutics, you'll see that this stock gapped down big back in April from around $11 to $7.51 a share with monster volume. Following that sharp move lower, shares of HALO have started to rebound strong and uptrend towards its recent high of $9.83 a share. During that uptrend, shares of HALO have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed HALO within range of triggering a major breakout trade.

Traders should now look for long-biased trades in HALO if it can manage to trigger a near-term breakout trade above some overhead resistance levels at its 200-day moving average of $9.39 a share, and above some more resistance at $9.83 a share with high volume. Look for a sustained move or close above those levels with volume that's near or above its three-month average volume of 792,700 shares. If we get that action soon, then HALO could re-fill the rest of that gap and take out $11.50 a share, and then possibly re-test its March high of $13.50 a share.

One could be a buyer of HALO off weakness to anticipate that breakout, and simply use a stop just below its 50-day moving average of $8.45 a share. If you buy off weakness, then I would add to the position once $9.39 to $9.83 is taken out with heavy upside volume. One could also buy off strength and get long once those breakout levels are taken out with volume, and simply use a stop just below $9.39 a share.

The short-sellers are active in this stock, since the current short interest as a percentage of the float for HALO is very high at 11.8%. If that breakout triggers soon, then a big short-squeeze could develop as HALO moves back into that gap from back in April.

To see more hot under-$10 equities, check out the Stocks Under-$10 Setting Up to Explode portfolio on Stockpickr.

-- Written by Roberto Pedone in Winderemere, Fla.


Follow Stockpickr on Twitter and become a fan on Facebook.
At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Windermere, Fla., is an independent trader who focuses on stocks, options, futures, commodities and currencies. He is also an outside contributor to and maintains the website, which he sold to Blue Wave Advisors in 2008. Roberto studied International Business at The Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany.
6 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
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
DEPO $16.14 0.00%
HALO $7.90 0.00%
NAVB $0.80 0.00%
SQNM $1.61 0.00%
AAPL $94.02 0.00%


Chart of I:DJI
DOW 16,204.97 -211.61 -1.29%
S&P 500 1,880.05 -35.40 -1.85%
NASDAQ 4,363.1440 -146.4150 -3.25%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs