Another stock in the biotechnology and drugs complex that could be poised for a sharp rebound trade is Rosetta Genomics (ROSG), 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.