One more stock that's setting up to trigger a major breakout trade is biotechnology and drugs player Dyax (DYAX), which focuses on identifying, developing and commercializing treatments for conditions identified as plasma kallikrein (bradykinin) mediated angioedema, including hereditary angioedema, ACE inhibitor-induced angioedema and angioedema. This stock is off to a blazing hot start in 2012, with shares up a whopping 100%.
If you look at the chart for DYAX, you'll see that this stock has been uptrending strong for the past six months, with shares soaring from a low of $1.33 to a recent high of $2.88 a share. During that monster uptrend, shares of DYAX have been consistently making higher lows and higher highs, which is bullish technical price action. That move is now quickly pushing DYAX within range of triggering a major breakout trade.
Market players should now look for long-biased traders in DYAX if it can manage to clear some key breakout levels of $2.88 to $2.90 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 535,998 shares. If we get that move soon, then DYAX could trend higher towards its next significant overhead resistance levels at $3.50 $4.14 a share.One could look to buy DYAX off weakness and simply use a stop below some key near-term support at $2.50 a share. I would rather buy off strength once DYAX takes out $2.88 to $2.90 a share with heavy volume. If you buy off strength, you can actually use that same stop just below $2.50 a share. Keep in mind that DYAX has a major catalyst on the horizon, since the company will meet with the FDA on September 5 for interim Phase II data on its drug Ecallantide, which is used for the treatment of ACE-induced angioedema, a life threatening inflammatory response brought on by adverse reaction to angiotensin-converting enzyme inhibitors. If this stock triggers that breakout soon, then it will likely spike higher right into that event. To see more breakout candidates, check out the Breakout Stocks of the Week portfolio on Stockpickr. -- Written by Roberto Pedone in Winderemere, Fla.
Twitter and become a fan on Facebook.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
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.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
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.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV