One development stage specialty pharmaceutical player that's starting to move within range of triggering a near-term breakout trade is Ventrus Biosciences (VTUS), which is focused on the development and commercialization of late-stage prescription drugs for gastrointestinal disorders. This stock has been destroyed by the bears in 2014, with shares off huge by 67%.
If you take a look at the chart for Ventrus Biosciences, you'll notice that this stock gapped down huge in February from $4.69 to under $1.75 a share with heavy downside volume. This stock continued to trend lower the next two months, with shares hitting a fresh low of $1.13 a share earlier this month. Amazingly, shares of VTUS did not go down during Thursday's market carnage and the stock is now starting to trend just a bit higher and move within range of triggering a near-term breakout trade.
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Traders should now look for long-biased trades in VTUS if it manages to break out above Thursday's high of $1.25 a share to some more near-term overhead resistance at $1.31 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average volume of 956,437 shares. If that breakout busts out soon, then VTUS will set up to re-test or possibly take out its next major overhead resistance levels at $1.47 to $1.50 a share. Any high-volume move above those levels will then give VTUS a chance to tag $1.75 a share.
Traders can look to buy VTUS off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $1.15 or at $1.13 a share. One can also buy VTUS off strength once it starts to clear those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.