Halozyme Therapeutics

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Another stock that insiders are finding attractive here is biotechnology and drugs player Halozyme Therapeutics ( HALO), which develops and commercializes various products for patient care. Insiders are sniffing out some deep value here, since this stock is down by over 35% so far in 2012.

Halozyme Therapeutics has a market cap of $649.97 million and an enterprise value of $534.48 million. This stock trades at a premium valuation, with a price-to-sales of 15.70 and a price-to-book of 9.19. Its estimated growth rate for this year is -178.9%, and for next year it's pegged at 15.1%. This is a cash-rich company, since the total cash position on its balance sheet is $102.04 million and its total debt is zero.

A director just bought 20,000 shares, or about $113,000 worth of stock, at $5.70 per share.

From a technical perspective, HALO is currently trading below both its 50-day and 200-day moving averages, which is bearish. This stock recently gapped down big from around $9 to a low of $3.86 a share with monster volume. Following that gap down, shares of HALO have rebounded sharply to its current price of $5.77 a share. That move is quickly pushing HALO within range of triggering a near-term breakout trade.

If you're in the bull camp on HALO, then I would look for long-biased trades once this stock manages to break out above some near-term overhead resistance levels at $6.17 to $6.23 a share with high volume. Look for a sustained move or close above those levels with volume that's near or above its three-month average action of 1.1 million shares. If that breakout triggers soon, then HALO will have a great chance of re-filling that gap and possibly trending back toward $7 to $9 a share. Keep in mind that you can buy HALO off weakness, and then simply use a stop just below $5.55 to $5.33 a share.

On the flip side, I would avoid HALO or look for short-biased trades if it fails to trigger that breakout soon, and then drops below some major near-term support at $5.55 to $5.23 a share with heavy volume. If we get that action, then HALO could easily trend back toward its recent low of $3.86 a share.

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