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4 Biotech Stocks Surging on Huge Volume - views
WINDERMERE, Fla. (Stockpickr) -- Professional traders running mutual funds and hedge funds don’t just look at a stock’s price moves; they also track big changes in volume activity. Many times when above average volume moves into equity it precedes a large spike in volatility.
Unusual volume can also be a major signal that hedge funds and momentum traders are piling into a stock ahead of a catalyst. These types of traders like to get in well before a large spike, so it’s always a smart move to monitor unusual volume. That said, remember to combine trend and price action with unusual volume. Put them all together to help you decipher the next big trend for any stock.
With that in mind, let's take a look at several stocks rising on unusual volume today.
Vivus (VVUS) is a biopharmaceutical company engaged in the development and commercialization of therapeutic drugs for underserved markets, including obesity and related morbidities, such as sleep apnea and diabetes, and men's sexual health. This stock is trading up 16.5% at $30.84 in recent trading.
Today’s Volume: 24 million
Average Volume: 3.6 million
Volume % Change: 1,491%
Shares of VVUS are skyrocketing today after the company received government approved for its drug Qsymia to combat obesity. Some Wall Street analysts are predicting that Qsymia could do $1 billion in annual sales by 2016.
From a technical perspective, VVUS is blasting off to the upside here with monster volume. This sharp move has now pushed VVUS into breakout territory, since the stock has taken out some near-term overhead resistance at $29.99 with volume.
Traders should continue to look for long-biased trades as long as VVUS is trending above $29.99 with strong upside volume flows. I would consider any upside volume day that registers near or above 3.6 million shares as bullish. If we continue to see VVUS hold its trend over $29.99, then this stock could easily be on its way to $35 to $40 in the near future.
Vivus was included on a list of 4 Drug Stocks Facing FDA Approval Decisions in July.
Infinity Pharmaceuticals (INFI) is a drug discovery and development company. Infinity’s lead product candidate is saridegib, also known as IPI-926, an oral molecule that inhibits the Hedgehog pathway by binding to the Smoothened receptor. This stock is trading up 7.6% at $15.82 in recent trading.
Today’s Volume: 286,000
Average Volume: 220,871
Volume % Change: 161%
Shares of INFI are ripping to the upside today after the company announced it has restructured its strategic alliance with Mundipharma and Purdue Pharmaceutical Products by mutual agreement. Under this move, Infinity regains worldwide rights for its phosphoinositide-3-kinase (PI3K) program, its fatty acid amide hydrolase (FAAH) program and its early discovery programs.
From a technical perspective, INFI is spiking sharply higher here with above-average volume. This move is quickly pushing the stock within range of triggering a major breakout trade. That trade will hit once INFI takes out some near-term overhead resistance at $16.44 with high volume.
Traders should now look for long-biased trades once INFI sustains a move or close over $16.44 with volume that’s near or above 220,871 shares. If we get that action, then INFI will enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets if INFI triggers that breakout with volume are $18 to $20.
Alkermes (ALKS) is an integrated biotechnology company engaged in the business of developing, manufacturing and commercializing medicines for the treatment of prevalent, chronic diseases. This stock is trading up 3.2% at $18.05 in recent trading.
Today’s Volume: 1.05 million
Average Volume: 1.25 million
Volume % Change: 71%
From a technical perspective, ALKS is gapping up strong here with decent volume. This move today is coming after ALKS found some buying interest recently right near its 200-day moving average of $16.94. This spike today is also pushing ALKS within range of triggering a major breakout trade. That trade will hit once ALKS takes out some overhead resistance levels at $18.13 to $18.44 and then $18.58 to $18.84 with high volume.
Traders should now look for long-biased trades once ALKS sustains a move or close above those levels with volume that’s near or above 1.25 million shares. If ALKS can manage to take out all of those levels with volume, then this stock will have a great a chance of re-testing and possibly taking out its next major overhead resistance of $19.87.
On the flipside, I would avoid ALKS or look for short-biased trades if this stock fails to trigger that breakout and then moves back below its 200-day at $16.94 and its 50-day at $16.65 with high volume.
Supernus Pharmaceuticals (SUPN) is a specialty pharmaceutical company focused on developing and commercializing products for the treatment of central nervous system diseases, including neurological and psychiatric disorders. This stock is trading up 23% at $13.20 in recent trading.
Today’s Volume: 252,000
Average Volume: 198,596
Volume % Change: 190%
From a technical perspective, SUPN is ripping huge to the upside here with above-average volume. This move is coming after SUPN recently pulled back from $13.35 to $9.76 in just a few trading sessions.
Traders should now look for long-biased trades once SUPN triggers a near-term breakout trade above $13.35 with high volume. Look for a sustained move or close above $13.35 with volume that hits near or above 198,596 shares. At last check, SUPN has hit an intraday high of $13.25 and volume is already over 250,000 shares traded. If that breakout triggers today or soon, then SUPN will have an excellent chance of re-testing and possibly taking out its all-time high near $15.20.
To see more stocks rising on unusual volume, check out the Stocks Rising On Unusual Volume portfolio on Stockpickr.
-- Written by Roberto Pedone in Winderemere, Fla.
At the time of publication, author had no positions in stocks mentioned.
Roberto Pedone, based out of Windermere, Fla., is an independent trader who focuses on stocks, options, futures, commodities and currencies. He is also an outside contributor to Beconequity.com and maintains the website Maddmoney.net, which he sold to Blue Wave Advisors in 2008. Roberto studied International Business at The Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany.