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A stock in the biotechnology and drugs complex whose insiders have bought up a decent amount of stock is Endoyte ( ECYT), which is engaged in developing therapies for the treatment of cancer and inflammatory diseases. Insiders are spotting some deep value here since the stock is off by over 50% in 2011.

Endoyte has a market cap of $155.08 million and an enterprise value of -$14.82 million. Its estimated growth rate for the next quarter is 25.6%, and for next year it's pegged at 17.1%. This is an extremely cash-rich company, with a total cash position of $138.87 million and total debt of just $12.19 million. After you back out the debt, its total cash comes to $126.68 million.

A director just bought 125,000 shares, or $420,000 worth of stock, at $3.36 per share.

From a technical standpoint, ECYT is currently trading substantially below both its 50-day and 200-day moving averages, which is bearish. This stock recently gapped down huge from over $10 a share to under $4 a share. After that monster gap down that came on huge volume, ECYT went on to hit a low of $3.02.

If you're bullish on ECYT, I would look to get long once it breaks out above some near-term overhead resistance at $3.28 on high volume. Look for volume that's tracking in close to or above its three-month average action of 439,886 shares. I would use a mental stop just below $3.10 or $3.02 a share, which are both near-term support zones.

Another way to trade ECYT is to buy the stock once it starts to trade back above the gap down day high at $4.29 a share on huge volume. Once that trade triggers, then ECYT should bounce huge as it attempts to refill some of that massive gap down. Keep in mind that stocks with lots of gaps in their charts are risky, so that trade above the gap down day high is a better play since it will demonstrate more strength in this equity.

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