Corrections: Harry Boxer’s three biotech-stock breakouts to watch
(Corrects story to say Abeona has clinical-stage gene therapies, not an IBS drug therapy.)
Three biotechnology companies and a health-care services company top our list of stocks to watch today because of strong technical momentum and positive news.
Abeona Therapeutics Inc. ABEO, -3.33% spiked 7%, or $ 1.20, on Tuesday, closing at $ 17.90 on very heavy volume of 3.9 million shares traded. Price had hit $ 23 on Oct. 11 and came back down to support near $ 16 two days later, but it bounced back up Tuesday on news of the company’s next public stock offering. There had also been positive clinical trial news on Monday regarding its clinical-stage gene therapies, the latest in a line of positive earnings and Food and Drug Administration announcements this quarter. The stock has increased by 280% since June 16. If the stock closes above $ 19.25, that could open the door to the next target at $ 22.75.
Ignyta Inc. RXDX, -2.86% also popped 7%, or 95 cents, closing at $ 14.35 on heavy volume of 1.4 million shares traded. The move came on news of both positive clinical trial results and an announcement from the European Medicines Agency that it has given special designation and support to the company’s tumor drug. The stock has been on a strong march up since it broke above its bull wedge consolidation pattern Oct. 2, when the biotech company had announced positive drug data. There is significant lateral resistance around $ 15, notable because price could not persist above $ 15 the last time it was this high in December 2015. Beyond that, the rising channel top points to the potential of $ 22-$ 24.
Spectrum Pharmaceuticals Inc. SPPI, -1.12% broke out above a bull flag consolidation pattern on Tuesday, gaining 52 cents and closing at $ 14.46 on 1.7 million shares traded. The move came on news that positive clinical study data will be presented before market open on Wednesday by doctors from the University of Texas MD Anderson Cancer Center. Next target: $ 18. Short interest of 11 times its average volume could fuel the move as shorts cover on a rally.
Teladoc Inc. TDOC, -0.78% moved up $ 1.30 and closed at $ 34 on 1 million shares traded and no news from the company. There have been two encouraging tests of the present price channel. The stock came down hard into $ 30.80 on Sept. 21, but stayed above its long-term trendline up. A retest of the bottom of the channel occurred Monday and price still held its ground. Simultaneously, price has been coiling in a bull wedge consolidation pattern since the end of June. If the tele-health stock closes above $ 35, price could run to $ 37.50. Short interest of 17 times its average volume could fuel the move as shorts cover on a rally.
See Harry’s video-chart analysis on these stocks.
The writer has no holdings in any of the stocks mentioned in this column.
Harry Boxer is founder of TheTechTrader.com, a live trading room featuring his stock picks, technical market analysis and live chart presentations.