Another stock that could trigger a big breakout trade soon is
(HZNP - Get Report), a biopharmaceutical company that develops and commercializes medicines to target unmet therapeutic needs in arthritis, pain and inflammatory diseases. This stock has been ripping to the upside so far in 2012, with shares up over 75% so far.
If you take a look at the chart for Horizon Pharma, you'll see that this stock has been uptrending strong since breaking out in mid-June above some past overhead resistance at $4.51 to $4.73 a share with monster volume. Since triggering that breakout, shares of HZNP have skyrocketed to its recent high of $8.72 a share. During that uptrend, shares of HZNP have consistently made higher lows and higher highs, which is bullish technical price action. After hitting that high of $8.72 a share, shares of HZNP have pulled back and started to trade sideways between $7.60 and $6.92 a share.
>>5 Biotech Stocks Under $10 Set to Soar
Market players should now look for long-biased traders in HZNP if this stock can manage to trigger a near-term breakout trade above some overhead resistance at $7.60 a share with high volume. Look for a sustained move or close above $7.60 with volume that's near or above its three-month average action of 782,749 shares. If we get that action soon, then HZNP will have a great chance of re-testing and possibly taking out its recent high of $8.72 a share.
This company has a major catalyst on the horizon (no pun intended), since it will meet with the FDA on July 26 for the possibly approval of its rheumatoid arthritis drug LODOTRA. The short-sellers are also heavily involved in this stock, since the current short interest as a percentage of the float for HZNP is a whopping 25%. If HZNP can manage to trigger that breakout ahead of July 26, then this stock has the chance of short-squeezing huge into its PDUFA action date.
One can look to buy this stock off any weakness, and simply use a stop right below $6.95 to $6.92 a share. You could also just buy off strength once HZNP clears $7.60 with heavy volume, and simply use a stop below those same levels. Either way, this stock will be in play big-time if it clears $7.60 with volume in the coming days.
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