NewLink Genetics

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One biotech stock that insiders are buying is NewLink Genetics ( NLNK), which is focused on discovering, developing and commercializing novel immunotherapeutic products to improve cancer treatment options for patients and physicians. Insiders are buying this stock into modest strength, since shares are up 5% in the last six months.

NewLink Genetics has a market cap of $263 million and an enterprise value of $236 million. This stock trades at a premium valuation, with a price-to-sales of 155.66 and a price-to-book of 11.31. Its estimated growth rate for this year is 61.7%, and for next year it's pegged at -10.5%. This is a cash-rich company, since the total cash position on its balance sheet is $28.30 million and its total debt is just $1.45 million.

A beneficial owner just bought 880,000 shares, or $10 million worth of stock, at $11.40 per share.

From a technical perspective, NLNK is currently trending above its 50-day moving average and just below its 200-day moving average, which is neutral trendwise. This stock has been trending sideways for the last three months, with shares moving between $10.60 on the downside and $13.13 on the upside. A high-volume move above the upper-end of its recent range will trigger a breakout trade for shares of NLNK.

If you're bullish on NLNK, then I would look for long-biased trades as long as it's trending above its 50-day at $11.88, and then once it manages to break out above some near-term overhead resistance levels at $13.13 a share and above its 200-day at $13.19 a share with high volume. Look for a sustained move or close above those levels with volume that registers near or above its three-month average action of 86,573 shares.

If that breakout triggers soon, then NLNK will set up to re-test or possibly take out its next major overhead resistance levels at $13.94 to $14.34 a share. Any move above $14.34 will then put $15.50 to $15.72 into focus for shares of NLNK.

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