Another stock in the biotechnology and drugs complex that could be poised for a sharp rebound trade is
, which develops and commercializes diagnostic tests based on microRNAs. This stock is off to a monster start in 2012, with shares up a whopping 70%.
If you take a look at the chart for Rosetta Genomics, you'll see that this stock exploded higher back in May, when it soared from $1.40 to $23.43 a share in just a few weeks. Following that monster move, shares of ROSG started to selloff and since late June the stock has done nothing but consistently make lower highs and lower lows. That type of price behavior is bearish technical action, and it drove shares of ROSG down from $17.35 to its recent low of $4.07 a share. That move toward $4 is staring to make ROSG look interesting again from the long side, since that $4 level is a previous support zone from its run back in May. Shares of ROSG are also attractive here for an oversold bounce, since its current relative strength index reading is now 26.54.
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Traders should now look for long-biased trades in ROSG if it can manage to hold a trend above $4 a share with strong upside volume flows. I would consider any upside volume day that registers near or above 1,333,340 shares as bullish. Keep in mind that over 2.2 million shares traded on Wednesday after the stock closed up sharply. That was the first large-volume upside day we've seen for ROSG since back in June. If ROSG can hold its trend above $4 with strong upside volume flows, then this stock could easily see a massive bounce back toward $6.50 to $8 a share in the near future.