3 Biotech Stocks Under $10 in Breakout Territory

DELAFIELD, Wis. (Stockpickr) -- At Stockpickr, we track daily portfolios of stocks that are the biggest percentage gainers and the biggest percentage losers.

Stocks that are making large moves like these are favorites among short-term traders because they can jump into these names and try to capture some of that massive volatility. Stocks that are making big-percentage moves either up or down are usually in play because their sector is becoming attractive or they have a major fundamental catalyst such as a recent earnings release. Sometimes stocks making big moves have been hit with an analyst upgrade or an analyst downgrade.

Regardless of the reason behind it, when a stock makes a large-percentage move, it is often just the start of a new major trend -- a trend that can lead to huge profits. If you time your trade correctly, combining technical indicators with fundamental trends, discipline and sound money management, you will be well on your way to investment success.

With that in mind, let's take a closer look at a several stocks under $10 that are making large moves to the upside.

Biota Pharmaceuticals (BOTA), a biopharmaceutical company, focuses on the discovery and development of anti-infective products in Australia. This stock closed up 13.2% to $3.34 in Tuesday's trading session.

Tuesday's Range: $2.95-$3.37
52-Week Range: $2.35-$7.07
Tuesday's Volume: 134,000
Three-Month Average Volume: 147,256

From a technical perspective, BOTA exploded higher here right off its 50-day moving average of $2.94 with decent upside volume flows. This sharp spike to the upside on Tuesday pushed shares of BOTA into breakout territory, since the stock took out some near-term overhead resistance levels at $3.12 to $3.21. Shares of BOTA are now quickly moving within range of triggering another big breakout trade. That trade will hit if BOTA manages to take out Tuesday's intraday high of $3.37 to some more key overhead resistance at $3.52 with high volume.

Traders should now look for long-biased trades in BOTA as long as it's trending above $3.12 or above its 50-day at $2.94 and then once it sustains a move or close above those breakout levels with volume that hits near or above 147,256 shares. If that breakout hits soon, then BOTA will set up to re-test or possibly take out its next major overhead resistance levels at its 200-day moving average of $4.33 to its gap-down-day high from April at around $4.50.

Halozyme Therapeutics (HALO), a biopharmaceutical company, researches, develops and commercializes human enzymes. This stock closed up 6.7% to $9.51 in Tuesday's trading session.

Tuesday's Range: $9.11-$9.63
52-Week Range: $6.51-$18.18
Tuesday's Volume: 1.66 million
Three-Month Average Volume: 1.77 million

From a technical perspective, HALO ripped sharply higher here right off its 50-day moving average of $9.19 with decent upside volume flows. This sharp uptick to the upside on Tuesday pushed shares of HALO into breakout territory, since the stock cleared some near-term overhead resistance at $9.42. Market players should now look for a continuation move to the upside in the short-term if HALO can manage to take out Tuesday's intraday high of $9.63 to some more key overhead resistance at $9.98 with high volume.

Traders should now look for long-biased trades in HALO as long as it's trending above Tuesday's intraday low of $9.11 and then once it sustains a move or close above $9.63 to $9.98 with volume that hits near or above 1.77 million shares. If that move gets started soon, then HALO will set up to re-test or possibly take out its next major overhead resistance level at $10.63. Any high-volume move above $10.63 will then give HALO a chance to re-fill some of its previous gap-down-day zone from April that started just above $12.

Ariad Pharmaceuticals (ARIA), an oncology company, is engaged in the discovery, development and commercialization of medicines for cancer patients. This stock closed up 9.9% to $6.17 in Tuesday's trading session.

Tuesday's Range: $5.60-$6.28
52-Week Range: $2.15-$23.00
Tuesday's Volume: 16.62 million
Three-Month Average Volume: 8.62 million

From a technical perspective, ARIA exploded higher here right above some near-term support around $5.50 with monster upside volume. This sharp spike to the upside on Tuesday briefly pushed shares of ARIA above both its 50-day moving average of $6.24 and its 200-day moving average of $6.25. Shares of ARIA are now quickly moving within range of triggering a near-term breakout trade above some key overhead resistance levels. That trade will hit if ARIA manages to take out some near-term overhead resistance levels at $6.40 to $6.75 with high volume.

Traders should now look for long-biased trades in ARIA as long as it's trending above $5.75 or above $5.60 and then once it sustains a move or close above those breakout levels with volume that hits near or above 8.62 million shares. If that breakout gets set off soon, then ARIA will set up to re-test or possibly take out its next major overhead resistance levels at $7.06 to $7.27, or even $7.73 to $7.84.

To see more stocks that are making notable moves higher, check out the Stocks Under $10 Moving Higher portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

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At the time of publication, author had no positions in stocks mentioned. Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.

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