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One biotechnology and drugs player that insiders are loading up on here is
Vivus(VVUS - Get Report), which is engaged in the development and commercialization of therapeutic drugs for underserved markets, including obesity and related morbidities, such as sleep apnea and diabetes, and men's sexual health. Insiders are buying this stock into strength, since shares are up a whopping 134% so far in 2012.
Vivus has a market cap of $2.31 billion and an enterprise value of $2.02 billion. This stock trades at a premium valuation, with a forward price-to-earnings of 57.62. Its estimated growth rate for this year is -75%, and for next year it's pegged at 140.8%. This is a cash-rich company, since the total cash position on its balance sheet is $310.39 million, and its total debt is zero.
A director just
bought 20,000 shares, or about $434,000 worth of stock, at $21.50 per share.>>5 Biotech Stocks Under $10 Blasting Higher
From a technical perspective, VVUS is currently trading below both its 50-day moving average and above its 200-day moving average, which is neutral trendwise. This stock recently sold off after it printed its 52-week high of $31.21 a share to its August low of $19.75 a share. Since hitting that low, shares of VVUS have been trading range bound between $19.75 on the downside and $23.52 on the upside. A move outside of that range will likely setup the next major trend for VVUS.
If you're bullish on VVUS, then I would look for long-biased trades once this stock triggers a breakout above some near-term overhead resistance at $23.52 to its 50-day moving average of $25.09 a share with high volume. Look for a sustained move or close above those levels with volume that registers near or above its three-month average action of 4.9 million shares. If that breakout triggers soon, then VVUS could setup to re-test its 52-week high of $31.21.
On the flipside, I would avoid VVUS or look for short-biased trades if this stock fails to trigger that breakout soon and then drops back below some major support levels at $21.31 to $19.75 a share, and then below its 200-day moving average of $18.57 a share with heavy volume. Any high-volume move below those levels will set this stock up for a decent fall.