One stock that looks poised to trigger a major breakout trade is Durect (DRRX), which is focused on the development of pharmaceutical products based on its proprietary drug-delivery technology platforms. This stock has been hit hard by the bears during the last three months, with shares off by 21%.
This company has a major catalyst on the horizon, since it is preparing to submit a new drug application in the first quarter of 2013 for Posidur, a post-operative anesthetic that utilizes its patented Saber technology.
If you take a look at the chart for Durect, you'll notice that this stock has just started to trade back above both its 50-day moving average at 96 cents and it 200-day moving average at $1.01 a share with strong upside volume flows. Volume over the last three trading sessions (all up days) has registered either very close to or well above its three-month average volume of 468,602 shares. That action has now pushed shares of DRRX within range of triggering a major breakout trade.Traders should now look for long-biased trades in DRRX if it manages to break out above some near-term overhead resistance at $1.15 a share with high volume. Look for a sustained move or close above $1.15 a share with volume that hits near or above its three-month average action of 468,602 shares. If that breakout hits soon, then DRRX will set up to re-test or possibly take out its next major overhead resistance levels at $1.42 to $1.71 a share. Traders can look to buy DRRX off any weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average of 96 cents per share or near some key support at 92 cents per share. One could also buy DRRX off strength once it takes out $1.15 a share with volume and then simply use a stop that sits close to its 200-day moving average of $1.01 a share.
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
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
24/7 market commentary from Jim Cramer and 20+ veteran Wall Street gurus. Get access to the latest trading ideas on stocks, options, and ETFs as well as a real-time forum to see the pros exchanging their investment ideas.
- Jim Cramer + 20 Wall Street pros
- Intraday commentary & news
- Real-time trading forum
- Actionable trade ideas
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 + 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