This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

The Next Big Biotech Mover: Ariad Pharma

DELAFIELD, Wis. (Stockpickr) -- Anyone who has followed me for a long time knows that I have a keen eye for spotting biotech stocks that are setting up technically for monster moves higher.

>>5 Stocks Insiders Love Right Now

One of my most recent examples is IsoRay (ISR), which I highlighted in Feb. 19's "5 Stocks Poised to Skyrocket Higher" at around 70 cents per share. I mentioned in that piece that shares of ISR had recently formed a major bottoming chart pattern at around 66 cents to 67 cents per share. This stock was starting to bounce off those support levels and was moving within range of triggering a major breakout trade above a key downtrend line. That breakout triggered and ISR is now trading at over $1.50 a share, which represents a monster gain of over 100%.

Another small-cap biotech stock that I liked recently was BG Medicine (BGMD), which I featured in Feb. 24's "5 Biotech Stocks to Trade for Breakouts" at around $1.24 per share. I mentioned in that piece that shares of BGMD had been uptrending, with the stock consistently making higher lows and higher highs, which is bullish technical price action. This stock was starting to move within range of triggering a major breakout trade. That breakout came in spades on Tuesday after shares of BGMD soared over 30% and the stock hit an intraday high of $1.87 a share.

Yet another small-cap biotech stock that I was hot for recently was Skystar Bio Pharmaceuticals (SKBI), which I featured in Feb. 12's "5 Stocks Ready to Explode Higher" at around $4.60 per share. I mentioned in that piece that shares of Skystar Bio Pharmaceuticals had been uptrending strong prior to my piece and this stock was quickly moving within range of triggering a major breakout trade. That trade triggered, and SKBI recently hit a new 52-week high of $7 a share. That represents a monster move of over 50% from the time I liked the setup.

>>5 Stocks Set to Soar on Bullish Earnings

As you can see, I have a pretty good eye for spotting the big movers in the biotech sector before they take off and explode. The next biotech stock that I believe is setting up for a monster move higher is Ariad Pharmaceuticals (ARIA), an oncology company focused on the discovery, development and commercialization of medicines for cancer patients.

Ariad Pharmaceuticals ran into some major problems last year when its lead leukemia drug Iclusig was pulled off the market. because it was found to cause severe blood clots and narrowing of blood vessels. The drug has now been returned to the marketplace with a longer warning label that maps out the risks involved with taking the drug. Since the drug has been put back on the market, some rumors have started to make the rounds that Ariad Pharmaceuticals could be a buyout target for Eli Lilly (LLY) or GlaxoSmithKline (GSK). Some of those rumors have suggested that ARIA could fetch as much s $20 a share.

Regardless of the rumors, I like to focus on the charts and right now shares of ARIA are starting to show signs technically that large move higher could be in the cards soon.

>>3 Stocks Rising on Big Volume

If you consult the chart for ARIAD Pharmaceuticals, you'll notice that this stock recently formed a double top chart pattern at $9.22 to $9.13 a share. Following that top, shares of ARIA sold off and pulled back and briefly traded below its 50-day moving average. That trip below its 50-day didn't last long and shares of ARIA are now starting to spike higher and begin to move within range of triggering a major breakout trade.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

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.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,265.99 +109.14 0.64%
S&P 500 2,011.36 +9.79 0.49%
NASDAQ 4,593.4250 +31.2360 0.68%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs