An under-$10 stock in the biotechnology and drugs complex that looks ready to soar higher is Arena Pharmaceuticals (ARNA - Get Report), which is focused on discovering, developing and commercializing oral drugs that target G protein-coupled receptors, in four therapeutic areas: cardiovascular, central nervous system, inflammatory and metabolic diseases. This stock has been on fire so far in 2012, with shares up over 357%.
If you take a look at the chart for Arena Pharmaceuticals, you'll notice that this stock sold off sharply from its June high of $13.50 a share to its recent low of $6.95 a share. During that downtrend, shares of ARNA were mostly making lower highs and lower lows, which is bearish technical price action. That said, during the last month shares of ARNA have stabilized and found buying interest near $7 a share. The stock has also started to make higher lows, and it's now setting up to triggering a near-term breakout trade.
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