5 Biotech Stocks Poised for Breakouts
Market players should now look for long-biased traders in DYAX if it can manage to clear some key breakout levels of $2.88 to $2.90 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 535,998 shares. If we get that move soon, then DYAX could trend higher towards its next significant overhead resistance levels at $3.50 $4.14 a share.
One could look to buy DYAX off weakness and simply use a stop below some key near-term support at $2.50 a share. I would rather buy off strength once DYAX takes out $2.88 to $2.90 a share with heavy volume. If you buy off strength, you can actually use that same stop just below $2.50 a share.
Keep in mind that DYAX has a major catalyst on the horizon, since the company will meet with the FDA on September 5 for interim Phase II data on its drug Ecallantide, which is used for the treatment of ACE-induced angioedema, a life threatening inflammatory response brought on by adverse reaction to angiotensin-converting enzyme inhibitors. If this stock triggers that breakout soon, then it will likely spike higher right into that event.
To see more breakout candidates, check out the Breakout Stocks of the Week portfolio on Stockpickr.
-- Written by Roberto Pedone in Winderemere, Fla.