Wednesday, August 27, 2014

4 Under-$10 Biotech Stocks 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.

Read More: Warren Buffett's Top 10 Dividend Stocks

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.

Read More: 5 Stocks Set to Soar on Bullish Earnings

OncoGenex Pharmaceuticals

OncoGenex Pharmaceuticals (OGXI), a biopharmaceutical company, develops and commercializes therapies that address treatment resistance in cancer patients. This stock closed up 4% to $3.38 in Tuesday's trading session.

Tuesday's Range: $3.25-$3.39

52-Week Range: $2.86-$14.25

Tuesday's Volume: 268,000

Three-Month Average Volume: 211,778

From a technical perspective, OGXI ripped higher here right off its 50-day moving average of $3.29 with above-average volume. This move is quickly pushing shares of OGXI within range of triggering a near-term breakout trade. That trade will hit if OGXI manages to take out some key near-term overhead resistance at $3.45 with high volume.

Traders should now look for long-biased trades in OGXI as long as it's trending above some near-term support around $3 and then once it sustains a move or close above $3.45 with volume that hits near or above 211,778 shares. If that breakout kicks off soon, then OGXI will set up to re-test or possibly take out its next major overhead resistance levels $3.84 to $4.33. Any high-volume move above those levels will then give OGXI a chance to make a run at $5.

Concert Pharmaceuticals

Concert Pharmaceuticals (CNCE), a clinical stage biopharmaceutical company, discovers and develops small molecule drugs for central nervous system disorders, renal disease, inflammation and cancer. This stock closed up 5.6% to $9.29 in Tuesday's trading session.

Tuesday's Range: $8.80-$9.40

52-Week Range: $7.12-$16.26

Tuesday's Volume: 136,000

Three-Month Average Volume: 156,897

From a technical perspective, CNCE ripped sharply higher here right above some near-term support at $8.67 and back above its 50-day moving average of $8.92 with lighter-than-average volume. This strong move to the upside on Tuesday is starting to push shares of CNCE within range of triggering a near-term breakout trade. That trade will hit if CNCE manages to take out Tuesday's intraday high of $9.40 to some more near-term overhead resistance at $9.95 with high volume.

Traders should now look for long-biased trades in CNCE as long as it's trending above some key near-term support at $8.67 and then once it sustains a move or close above those breakout levels with volume that hits near or above 156,897 shares. If that breakout gets underway soon, then CNCE will set up to re-test or possibly take out its next major overhead resistance levels at $10.44 to $10.87. Any high-volume move above those levels will then give CNCE a chance to tag $12 to $13.

AcelRx Pharmaceuticals

AcelRx Pharmaceuticals (ACRX), a development stage specialty pharmaceutical company, focuses on the development and commercialization of therapies for the treatment of acute and breakthrough pain. This stock closed up 4.3% to $6.99 in Tuesday's trading session.

Tuesday's Range: $6.64-$7.01

52-Week Range: $6.04-$13.64

Tuesday's Volume: 723,000

Three-Month Average Volume: 1.13 million

From a technical perspective, ACRX ripped notably higher here right above some near-term support at $6.50 with lighter-than-average volume. This stock recently formed a double bottom chart pattern at $6.11 to $6.06. Following that bottom, shares of ACRX have started to trend higher and it's now quickly approaching a major breakout trade. That trade will hit if ACRX manages to take out some key near-term overhead resistance levels at $7.15 to its gap-down-day high from July at $7.33 with high volume.

Traders should now look for long-biased trades in ACRX as long as it's trending above some near-term support at $6.50 or above those double bottom support levels and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.13 million shares. If that breakout gets underway soon, then ACRX will set up to re-fill some of its recent gap-down-day zone that started at $11.38.

CytRx

CytRx (CYTR) operates as a biopharmaceutical research and development company specializing in oncology. This stock closed up 3.7% to $3.29 in Tuesday's trading session.

Tuesday's Range: $3.17-$3.36

52-Week Range: $2.00-$8.35

Tuesday's Volume: 973,000

Three-Month Average Volume: 1.41 million

From a technical perspective, CYTR jumped higher here right above some near-term support at $3.05 with decent upside volume flows. This stock recently formed a double bottom chart pattern at $3.08 to $3.05. Following that bottom, shares of CYTR have started to spike higher and move within range of triggering a big breakout trade. That trade will hit if CYTR manages to take out some near-term overhead resistance levels at $3.42 to its 50-day at $3.66 and then above $3.74 with high volume.

Traders should now look for long-biased trades in CYTR as long as it's trending above those double bottom support levels and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.41 million shares. If that breakout develops soon, then CYTR will set up to re-test or possibly take out its next major overhead resistance levels at its 200-day moving average of $4.30 to $4.50.

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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