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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
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DennyT: TRV Income Statement $TRV $UTX $GLUU $ARIA $MBLY http://t.co/0hOskBdlKR
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30 Oct 14 07:25:11
DennyT: TRV Income Statement $TRV $UTX $GLUU $ARIA $MBLY http://t.co/FChMzGEIVK
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30 Oct 14 07:25:10
DennyT: TRV Income Statement $TRV $UTX $GLUU $ARIA $MBLY http://t.co/MmOvYvOqCI
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$CSIQ alot of talk going around about this one $V $ARIA $TRN $BHP $INTC http://t.co/aQM3LQBj2p
30 Oct 14 07:23:25
TRV Income Statement $TRV $UTX $GLUU $ARIA $MBLY Opinion,Chart,Stock,Recent Headlines,Hitting Buzz Stock Quote http://t.co/bUOAAF4RWr
30 Oct 14 07:11:51
$BBSI On Watch $ACT $GOOGL $GGAL $ARIA $GPRO http://t.co/tj5eZjRMuX
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30 Oct 14 07:06:49
lookn4wins: $ARIA 200 Simple Moving Average $ARIA Most recent http://t.co/wKIEv91J3l
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30 Oct 14 07:06:48
lookn4wins: $ARIA 200 Simple Moving Average $ARIA Most recent http://t.co/iWXiOanQck
30 Oct 14 07:02:17
$RDC Rowan Companies (RDC) 23.68 -0.28 (-1.17%) $VOIS $ARIA $RAD http://t.co/nOqWH1yHox
30 Oct 14 07:00:57
$NKE Buy or Sell? Click here to find out if $NKE is a buy hold or sell. Watching these stocks. $ARIA $BABA $HA http://t.co/0RLBeXzqn9
30 Oct 14 06:57:11
$ARIA 200 Simple Moving Average $ARIA Most recent stock chart and technical analysis. $BAC $FTK $EWZ $IYT $PLU http://t.co/MgZs1nmgUq
Roger E Bellefeuille
30 Oct 14 06:56:22
RT @pnani456: $ARIA watch for 6 cross http://t.co/1MfC6IgibX
Ani Anirudhan
30 Oct 14 06:52:53
$ARIA watch for 6 cross http://t.co/1MfC6IgibX
30 Oct 14 02:09:14
VIICQ Closed up 75% Yesterday! Special Update: http://t.co/8A33lxh1RR $FASC $ARIA $TUCN
30 Oct 14 00:36:26
http://t.co/l4qmOlz0qf Stock_Tracker: Stock DD Board: Ariad Pharmaceuticals (ARIA) 5.87 $ARIA ARIAD http://t.co/jDEA2R0CYs
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30 Oct 14 00:33:44
Stock_Tracker: Ariad Pharmaceuticals (ARIA) 5.87 $ARIA ARIAD http://t.co/xBvfqSbGPC
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30 Oct 14 00:33:42
Stock_Tracker: Ariad Pharmaceuticals (ARIA) 5.87 $ARIA ARIAD http://t.co/gTHEiVmUh5
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30 Oct 14 00:15:23
chartguy89: ARIA 5.87 Stock Charts $ARIA Ariad http://t.co/aQjaTJ4y26
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30 Oct 14 00:15:10
chartguy89: ARIA 5.87 Stock Charts $ARIA Ariad http://t.co/QUGV4Jga5n
30 Oct 14 00:06:33
http://t.co/l4qmOlz0qf chartguy89: Stock Charts: ARIA 5.87 Stock Charts $ARIA Ariad http://t.co/6MoD7H8cus
30 Oct 14 00:04:21
ARIA 5.87 Stock Charts $ARIA Ariad Pharmaceuticals Inc. (NASDAQ) Last Updated: 10/30/2014 02:04:27 ARIA Stock http://t.co/WnRnnamyQM
29 Oct 14 22:10:02
$MLCG closed up 166.67% today! Huge News: http://t.co/JxSMla9Afn $FASC $ARIA $TUCN
29 Oct 14 18:12:55
$MLCG closed up 166.67% today! Huge News: http://t.co/JxSMla9Afn $FASC $ARIA $TUCN
29 Oct 14 17:31:05
ARIA 5.87 Stock Charts $ARIA Ariad Pharmaceuticals Inc. (NASDAQ) Last Updated: 10/29/2014 19:31:11 ARIA Stock http://t.co/qGuiLll9OA
29 Oct 14 14:47:55
$ARIA with all this good news the last few week, the Stock didn't show really a positive reaction WHY ?
29 Oct 14 10:33:49
Subscribe to our Penny Stock Newsletter, for the best penny stock picks, for FREE: http://t.co/5DC8vbG515 $FASC $ARIA $TUCN
29 Oct 14 10:30:57
$ARIA no doubt the stock is heavy manipulated
29 Oct 14 10:29:55
$ARIA need a buyout else $ARIA will be out of cash soon
T Abuhasna
29 Oct 14 08:59:42
$ARIA $S $VPOR $PSID Hnmm slow day FLUCS but HUGE vol... Maybe a POP coming imo...
James P Worthy
29 Oct 14 08:01:18
$ARIA Commit To Buy ARIAD Pharmaceuticals At $3.50, Earn 17.1% Using Options http://t.co/6pFvSijNAi
John Smith
29 Oct 14 07:05:02
$ARIA - careful! tree shake than squeeze over $6 #news #breakingnews #cnbc $lake $shpg $cmrx $tkmr $ibio $bcrx $wmgi $wmgiz $arcp $bac $WFC
Peter Bardens
29 Oct 14 07:02:30
$ARIA Why Ariad Pharmaceuticals, Inc. Stock Catapulted Higher http://t.co/f2x5k4ipfG
John Smith
29 Oct 14 06:59:05
$ARIA - GREEN! Here comes the $6+ short squeeze! #news #breakingnews #cnbc $lake $shpg $cmrx $tkmr $ibio $bcrx $wmgi $wmgiz $arcp $bac $WFC
Жусупов Олег
29 Oct 14 06:57:10
$ARIA 6.00
John Smith
29 Oct 14 06:56:41
$ARIA - GREEN!!!!!! #news #breakingnews #cnbc $lake $shpg $cmrx $tkmr $ibio $bcrx $wmgi $wmgiz $arcp
Victor Roberts, MD
29 Oct 14 06:42:31
$ARIA Wow! Holding nice. I won't sell my swing position from yesterday now. Gains to continue! Let's cross 6 fast and get over major R! GLTA
John Smith
29 Oct 14 06:36:49
$ARIA getting ready to take out $6!? #news #breakingnews #cnbc $lake #DallasEbola $shpg $cmrx $tkmr $ibio $bcrx $wmgi $wmgiz $arcp
29 Oct 14 06:29:18
$CARA $IFON $mrge $Aria $CAMT Long will run today
Victor Roberts, MD
29 Oct 14 06:07:10
Commented on StockTwits: Short covering is accelerating! As i said prior, $ARIA will not see 5.5 again. U can sho... http://t.co/bcE7jZEeeo
29 Oct 14 06:02:11
@afmarko99 yea I hear you. Yes ER for $ARIA is next week. Guess we shall see
29 Oct 14 05:42:36
$Baba $achn $aria $bbry $fprx on watch
29 Oct 14 04:30:53
RT @ACInvestorBlog: $ARIA has the perfect set up to make a nice run here. Like it over 6 http://t.co/gZASd2yNi9
Victor Roberts, MD
29 Oct 14 04:01:57
Commented on StockTwits: $ARIA Daily short sale data is from 1 exchange only but gives good perspective! Price=Hi... http://t.co/3TtWvIEjP9
Ani Anirudhan
29 Oct 14 04:01:02
$ARIA close above 50 DMA, next target 200 DMA https://t.co/16G3jr9BDP via http://t.co/k5g1NvFiU6
Victor Roberts, MD
29 Oct 14 03:57:33
Commented on StockTwits: $ARIA decreasing short shares days to cover helping it's price gains! daily short sales... http://t.co/frP6AAw8Hu
Victor Roberts, MD
29 Oct 14 03:53:54
$ARIA Inst ownership @ 58%!! Crooked hedgies lost big on recent market pullback & forced to sell positions, can't lend short shares now! Hmm
Victor Roberts, MD
29 Oct 14 03:44:36
Commented on StockTwits: Forced short covering by Hedgies explains run up of all heavily shorted ones. $ARIA has ... http://t.co/1m5ARvwyn5
Victor Roberts, MD
29 Oct 14 03:39:47
IBB pulls back due to falling GILD SNY! I expect $ARIA pull back/sell off on opening bell. I'll wait for LOD and load up for reversal play.
29 Oct 14 02:56:17
Major New Penny Stock Pick Coming Today! Get The Exclusive First Look: http://t.co/vVXyqlasuZ $FASC $ARIA $TUCN
Antonio Costa
28 Oct 14 23:38:52
$ARIA has the perfect set up to make a nice run here. Like it over 6 http://t.co/gZASd2yNi9
By  +Follow March 28, 2014 9:43AM



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