This Day On The Street
Continue to site right-arrow
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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

5 Biotech Stocks Poised for Breakouts

Stocks in this article: VPHM SGMO TSPT GERN DYAX

Viropharma

One biotechnology and drugs player that's trading within range of triggering a near-term breakout trade is Viropharma (VPHM), which is engaged in the development and commercialization of products that address diseases, with a focus on products used by physician specialists or in hospital settings. This stock is off to a slow start so far in 2012, with shares down by over 14%.

If you take a look at the chart for Viropharma, you'll notice that this stock gapped down huge back in April from $31 to $20 a share on monster volume. Follow that sharp move lower, shares of VPHM formed a double-bottom chart pattern at around $19.12 to $19.02 a share, and then went on to spike higher toward its current price of $23.30 a share. That spike has now pushed VPHM within range of triggering a near-term breakout trade.

Traders should now look for long-biased traders in VPHM once it manages to trigger a breakout trade above some near-term overhead resistance at $23.43 to $23.89 a share, and then above its 200-day moving average of $24.76 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 action of 1.1 million shares.

>>22 Biopharma Stocks With Breakout Potential in 2012

If we get that action soon, then VPHM will have a great chance to re-fill some of that gap from back in April. We could easily see VPHM spike toward $27 to $28 a share in the near future.

One could look to buy VPHM off any weakness to anticipate the breakout and simply use a stop near its 50-day moving average of $21.76 a share. I would rather buy this off strength though and get long once it clears those breakout levels with high volume. Use a stop just below $23.43 if you get long off strength.

2 of 6

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,356.87 +288.00 1.69%
S&P 500 2,012.89 +40.15 2.04%
NASDAQ 4,644.3120 +96.4780 2.12%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs