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Ariad Pharmaceuticals (ARIA) Jumps on More Buyout Rumors

By  +Follow March 28, 2014 9:43AM
Tickers Mentioned:

Shares of small-cap pharma Ariad Pharmaceuticals (ARIA) were trading higher on Friday after rumors were started by British paper The Daily Mail that Jazz Pharmaceuticals (JAZZ) was interested in acquiring the company at $20 a share.

Ariad, already a company with a history of high-volume, volatile trading action has already been the subject of buyout rumors sparked by The Daily Mail, previously seeing shares climb in January after the paper reported that pharma giant Eli Lilly (LLY) was considering purchasing the company.

The article, which ran after the closing bell on Thursday, appears to be the impetus behind the nearly 8 percent gain in shares of Ariad on Friday morning. The stock gapped up 5.8 percent to $8.04 a share at the opening bell and gained from there, touching $8.20 a share at its peak.

However, given The Daily Mail’s previous whiff on a purported buyout, it’s clear that traders are taking this most-recent bit of rumor with a significant grain of salt. Given that the rumors cited a share price of $20, a nearly 165 percent premium on the trading price at Thursday’s closing bell, the relatively modest gain can’t be viewed as a ringing endorsement of the potential deal from Wall Street.

It’s also become par for the course for Ariad, a stock that has proven not to be for the faint-hearted investor over the last six months. The company nosedived on October 9 after the FDA placed a clinical hold on trials for ponatinib, its kinase inhibiting leukemia drug Iclusig, ultimately losing more than 75 percent of its value. In the following months, shares continued to swing wildly up and down on extremely heavy volume. However, looking past the interday volatility, Ariad has been making steady gains over the long term, and the FDA ultimately allowed the company to resume marketing and distributing Iclusig with new warnings about blood clots.

Earlier in the month, two trend lines appeared to converge as a falling resistance line that dated back to early September crossed a rising support level that formed in early November after the initial sell-off on Iclusig’s clinical hold. At first, it appeared as though the resistance level would win out, pushing shares below the support line that had largely been moving with the 20-day SMA.

Of course, the stock then began trading at very close to its 50-day SMA and crossed over the falling resistance line less than two weeks later. It’s currently trading in a relatively narrow corridor at close to $8.10 a share, with both the 20-day and 50-day SMAs very close to each other and shares trading very close to those levels.

Looking at a few other technical factors, the MACD line has very recently passed into positive territory, indicating that the current momentum could have real strength. However, the chart appears to show a stock that’s consolidating and waiting to be driven in one direction or the other by an external factor.

The fact that 9-day, 20-day, and 50-day moving averages are so close, and that current share prices remain close to each of those levels, would seem to point towards traders who aren’t seeing a lot of strong momentum, either bullish or bearish. Since falling off a cliff last year, the stock has rallied from a low of $2.15 to levels just over $8 a share. But throughout this rally, the stock pulled back any time its 14-day RSI hit 70, seeming to indicate many of those trading the stock are reticent of technical indicators.

That doesn’t mean there isn’t action, though. With an average daily volume of 14 million shares, about 7.5 percent of its float, over $110 million worth of Ariad stock is changing hands every day. It seems eminently possible that Ariad is poised to breakout in the relatively near future, it’s just unclear which direction that will be in.




DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.

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Results for ARIA
28 Jan 15 15:50:47
@PsychoOnWallSt $ARIA is not a buyout rumor play for me, it is a pure chart play.
28 Jan 15 15:50:19
Morning Trades: Sold $ADXS 10.80's avg from sub $10 yesterday Long $EXEL 1.90 avg (swing) Afternoon Trade: Long $ARIA 6.55 avg (swing)
28 Jan 15 15:32:03
Our Penny Stock Picks On $IJJP $TUNG & $QLTS Gained 117% In 3 Days! New Pick Coming: http://t.co/c7bXDM1sfp $FASC $ARIA $TUCN
Roy Friedman
28 Jan 15 13:42:02
$NVS Joe Jimenez thinks generic Gleevec will be universal 1st-line choice in CML; the battle is for 2nd line. $BMY $ARIA
Riley McDermid
28 Jan 15 13:38:25
RT @biospace: Is AstraZeneca Stalking Ariad? $ARIA $AZN http://t.co/ZIcVwzvU0Z @TSTbiotech @SeekingAlpha @BestOfBiotech @pharma_global @WS…
Phil Martin
28 Jan 15 13:31:58
$ARIA http://t.co/LQkbRdgRgV
Stock Rocket
28 Jan 15 13:31:44
Our Penny Stock Picks On $IJJP And $TUNG Gained A Combined 100% Mid-Day Today! Huge News: http://t.co/pFkAyf90sZ $FASC $ARIA $TUCN
28 Jan 15 12:25:15
http://t.co/xyIhT2pFrh <- Most people I refer to SuperTrades service have bought YEARLY subscriptions. $GPRO $ARIA $BITA $OAS $ARCP
28 Jan 15 11:58:33
Is AstraZeneca Stalking Ariad? $ARIA $AZN http://t.co/ZIcVwzvU0Z @TSTbiotech @SeekingAlpha @BestOfBiotech @pharma_global @WSJmarkets
28 Jan 15 11:11:51
28 Jan 15 11:08:49
28 Jan 15 11:05:47
28 Jan 15 11:05:20
$ARIA short 6.60, swing only
28 Jan 15 11:05:09
$BGMD $0.95 !!!!!! Countdown to $1.00 $MNKD $GILD $ARIA $ABMD $EXEL $ARNA $ZGNX $AMGN $ZIOP $ILMN $RMTI $LJPC $CPRX
28 Jan 15 10:58:53
Bilo Selhi
28 Jan 15 10:57:27
PHENOMENAL stock trade alerts http://t.co/T9zutL79nE $OTIV +20% http://t.co/n1M8D6Hf1g $ARAY $ARIA $IIVI $SPIL $AAPL
28 Jan 15 10:55:29
$BGMD $0.94 about to print!! Countdown to $1.00 $MNKD $GILD $ARIA $ABMD $EXEL $ARNA $ZGNX $AMGN $ZIOP $ILMN $RMTI $LJPC $CPRX
28 Jan 15 10:51:32
28 Jan 15 10:49:53
Bilo Selhi
28 Jan 15 09:57:25
FREE TRIAL STOCK ALERTS - http://t.co/T9zutL79nE $MEA +25% MUST SEE Track Record http://t.co/HInTz9szO7 $ARAY $ARIA $IIVI $SPIL $AAPL
PennyStock Zone
28 Jan 15 09:50:33
'Choose yourself!' book review http://t.co/eI9c5QLAlt $AMOT $ARIA $BDR $CAMT $CDZI $DGLY $FSI $INTT $MNDO $NVEE
Kenneth Meyerson
28 Jan 15 09:34:47
RT @DForman27: $aria This last SA article from value insights is complete bs. Insiders selling? No they're buying. Losses mounting? No! pro…
Mark Trader
28 Jan 15 09:27:34
http://t.co/vJ93JPRWBF has the most reliable picks in the market. The move fast and never fail. $WEN $SPF $NLY $GFI $SRC $ARIA
Dan Forman
28 Jan 15 09:04:31
$aria This last SA article from value insights is complete bs. Insiders selling? No they're buying. Losses mounting? No! profit by 2018
Large Void Bot
28 Jan 15 09:00:21
Popular: $YHOO, $AAPL, $BA, $FB, $RDWR, $F, $LGF, $SPLS, $GD, $USO, $ARIA, $NQ, $ANIP, $BRK.B, $GSK, $FAS, $WTI, $BRK.A
28 Jan 15 08:53:20
MidCap #Stocks Performance $FSL $EA $TUP $COMM $X $JNPR $TSS $WDC $TXT $ARIA $FCNCA $SPR $ADT $DOX $ABC more@ http://t.co/gYYX3fEVde
Bilo Selhi
28 Jan 15 08:42:23
Subscribers alerted to $FOMX +17% http://t.co/T9zutL79nE SEE TRACK RECORD http://t.co/WryBemA3fj $ARAY $ARIA $IIVI $SPIL $AAPL
28 Jan 15 08:37:22
RT @zDonShimoda: CS: $SGEN $ARIA $PTCT $PRTA Read-thru from Roche earnings call http://t.co/43tj8F5VOz
Jason Olive
28 Jan 15 08:26:08
RT @SeekingAlpha: ARIAD: The Worst May Not Be Over http://t.co/0DImCiGHXp $ARIA
28 Jan 15 08:21:06
$ARIA $CML: ARIAD: The Worst May Not Be Over: http://t.co/wije4eNDS4
Hung Tran, MS, MD
28 Jan 15 08:16:17
RT @SeekingAlpha: ARIAD: The Worst May Not Be Over http://t.co/0DImCiGHXp $ARIA
Seeking Alpha
28 Jan 15 08:16:07
ARIAD: The Worst May Not Be Over http://t.co/0DImCiGHXp $ARIA
Don Shimoda
28 Jan 15 08:14:32
CS: $SGEN $ARIA $PTCT $PRTA Read-thru from Roche earnings call http://t.co/43tj8F5VOz
28 Jan 15 07:57:48
Stopped out of $ARIA. Quick loss!
Trader News Daily
28 Jan 15 07:57:45
Wow http://t.co/PeRPkZkWiw just posted last weeks results. +429%. Crazy. They offer a free trial too. $BSBR $ARIA $GALE $NBG $MHR
DayTrading Power
28 Jan 15 07:56:10
10:56 DTP : long $ARIA 500 6.57
Bilo Selhi
28 Jan 15 07:42:22
Need help finding momentum stocks? http://t.co/T9zutL79nE Ranked #1 http://t.co/EhyLEWJgN2 http://t.co/ezr4gkGWkL $ARAY $ARIA $IIVI $SP
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28 Jan 15 07:34:04
I banked over 200% in gains during my 14-day trial with http://t.co/6cvEHBeuNR. Their 5 guru traders are amazing. $ARIA $MYEC $SWET
The Cardiac Kid
28 Jan 15 07:33:42
[SMART MONEY] : $ARIA 6.76 =: [SMART MONEY] http://t.co/CbvagexdSO
28 Jan 15 07:33:40
$ARIA lil pull
28 Jan 15 07:33:32
NC Health - Healthcare Sector Movers: $EXEL, $HNSN, $PSTI, $ABMD, $APRI, $ARIA, $GNVC, $TBIO, $MNKD, $PHMD, $LCI, $ZLTQ, $ANAC .....
John Smith
28 Jan 15 07:22:23
$ARIA surging on reports out of #London that $AZN looking to buy $ARIA! $20+/share!? $abbv #cnbc #msnbc $pfe $aapl $gs $GSK #BreakingNews
John Smith
28 Jan 15 07:19:43
$ARIA surging on reports out of #London that $AZN looking to buy $ARIA! $20+? $abbv #cnbc #msnbc $pfe $aapl $gs $GSK #BreakingNews
28 Jan 15 07:16:51
@sharkbiotech: $azn for $aria is outrageous
28 Jan 15 07:11:28
Another day, another pump buyout rumor for $ARIA
John Smith
28 Jan 15 07:10:02
$ARIA surging on reports out of #London that $AZN looking to buy $ARIA! $20+/share? $abbv #cnbc #msnbc $pfe $aapl $gs $GSK #BreakingNews
John Smith
28 Jan 15 07:09:17
$ARIA surging on reports out of #London that $AZN looking to buy $ARIA! $abbv #cnbc #msnbc $ctic $pfe $yhoo $aapl $gs $GSK #BreakingNews
28 Jan 15 07:08:36
RT @OpenOutcrier: $ARIA link that earlier $AZN chatter came from http://t.co/qCqOwTuZU7
Stock Trade Alerts
28 Jan 15 07:08:12
RT @OpenOutcrier: $ARIA link that earlier $AZN chatter came from http://t.co/qCqOwTuZU7
28 Jan 15 07:06:36
Long $ARIA and $ERY this morning!
By  +Follow March 28, 2014 9:43AM



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