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Ariad Pharmaceuticals (ARIA) Plummets on Signs it's Overbought

By  +Follow January 27, 2014 8:25AM
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The buyout rumor giveth, the buyout rumor taketh away.

Shares in Ariad Pharmaceuticals (ARIA) dropped again on Monday, giving up much of the 11 percent gain from Friday. Ariad actually gapped up almost five percent to start the day before starting to plunge about 15 minutes after the markets opened, ultimately shifting to a loss of about 9 percent by early afternoon.

Rumored Buyout May Not Materialize

Potentially driving the loss was an article by TheStreet’s Adam Feuerstein that cited an anonymous institutional investor who was shorting the stock as saying that Friday’s buyout rumors were unfounded. "A takeover of Ariad by any Big Pharma would be career suicide for the business development guy proposing such a deal," this investor told Feuerstein. The investor also cited the potential for competition from Novartis’ (NVS) myeloid leukemia treatment that fills a similar role to Ariad’s Iclusig.

Technical Signs Indicate ARIA Overbought

However, the more-likely source of the plunge can be found in technical factors that would seem to indicate the stock was overbought. Since its dramatic October plunge after the FDA pulled Iclusig on blood clotting concerns, and several months of back-and-forth swings on very heavy volume, Ariad has been staging a strong rally that has placed it among the best performers in its industry of the last two months.

Ariad’s heavy daily volume would indicate that this small-cap company has become something of a battleground stock, and clearly one most traders are watching. And, as such, the more likely explanation for today’s sell-off can be seen in the stock’s relative strength index (RSI) crossing 70 this morning, a technical sign that traditionally indicates a stock is overbought.

The stock also flirted with an RSI of 70 twice in late December and earlier this month, with a sell-off following soon after on both occasions. Volume today was once again very high, clearing 70 million shares by 2:30pm. With a short float of close to 25 percent, it’s clear that Ariad remains a focal point for bullish and bearish traders alike.

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. To read our full disclosure, please go to: http://www.equities.com/disclaimer


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Results for ARIA
NYSEStocks
27 Apr 15 07:16:39
WELCOME TO THE PARTY BMO – $ARIA IS UP 33.56% SINCE OUR INITIAL ALERT http://t.co/bfnGMG9GXL http://t.co/GStgpsObEu
10X Trading
27 Apr 15 07:16:33
Investors Morning Alert April 27 2015 http://t.co/O0KT15nVJD $MNKD $MHR $ARIA
NYSEStocks
27 Apr 15 07:06:07
WELCOME TO THE PARTY BMO – $ARIA IS UP 33.56% SINCE OUR INITIAL ALERT http://t.co/fr3jEmqXU1 http://t.co/gU80s4welK
Sourcingstocks.com
27 Apr 15 04:38:58
Who else will be watching $ARIA and $TRIL this week? @ http://t.co/BESH0NiP6w - #NASDAQ
Domenic Chaney
27 Apr 15 02:20:02
RT @lancejepsen: $ARIA Why Ariad Pharmaceuticals (ARIA) Might Surprise This Earnings Season - Tale of the Tape via @const1969 http://t.co/A…
Market Parse
27 Apr 15 00:19:36
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Market Parse
27 Apr 15 00:19:36
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SmallCaps
26 Apr 15 23:53:57
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Rick
26 Apr 15 23:50:37
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StockEarnings.com
26 Apr 15 23:30:36
$ARIA releasing Earnings on 5/7 Before Open (Confirmed). Anybody buying/selling in Earnings? http://t.co/WQcEzvo0uy
DNA Precious metals
26 Apr 15 17:34:35
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Sam
26 Apr 15 16:38:07
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Sourcingstocks.com
26 Apr 15 16:31:02
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Rosner Stocks
26 Apr 15 12:38:59
$ARIA stock News Click Here: http://t.co/A5dsMkwfdv Also See: $FNMA $AGEN $COPX $RSX #stockmarket #tradeideas ~
Stock Forums
26 Apr 15 11:57:52
$JNK stock Tick Click Here: http://t.co/4WOK07qt53 Also See: $ABX $XLU $ARIA $FTNT #stockmarket #tradeideas ~
Investors Hangout
26 Apr 15 11:29:19
$UVXY stock Bid Click Here: http://t.co/SJnZKmg1X1 Also See: $ARIA $AA $KR $VLO #stockmarket #tradeideas ~
Sourcingstocks.com
26 Apr 15 09:28:00
$ARIA and $TRIL continue to look to us fro this week @ http://t.co/NjRJiivTQh - $BMO #NASDAQ, #Biotech, #TSX
Investors Hangout
26 Apr 15 09:16:19
$OHI stock Last Price Click Here: http://t.co/6ezZnTOMTl Also See: $SPNC $XLK $VLO $ARIA #stockmarket #tradeideas ~
528InvestorRelations
26 Apr 15 08:42:12
WELCOME TO THE PARTY BMO – $ARIA IS UP 33.56% SINCE OUR INITIAL ALERT http://t.co/0vTDb3IkJ6 http://t.co/5Q0tWVTp6H
Miningfinance
26 Apr 15 08:42:07
WELCOME TO THE PARTY BMO – $ARIA IS UP 33.56% SINCE OUR INITIAL ALERT http://t.co/g9vAIFoqR6 http://t.co/dEjeE4Mrf2
Marijuanacharts
26 Apr 15 08:42:06
WELCOME TO THE PARTY BMO – $ARIA IS UP 33.56% SINCE OUR INITIAL ALERT http://t.co/5zyeNG5YG8 http://t.co/Puxu3lQwC5
Sourcingstocks.com
26 Apr 15 08:42:06
WELCOME TO THE PARTY BMO – $ARIA IS UP 33.56% SINCE OUR INITIAL ALERT http://t.co/OVHSAvKdGU http://t.co/xJOlhzq4tr
Sourcingstocks.com
26 Apr 15 08:26:19
WELCOME TO THE PARTY BMO – $ARIA IS UP 33.56% SINCE OUR INITIAL ALERT http://t.co/unSAMoPMVQ
Investors Hangout
26 Apr 15 08:22:03
$ARIA stock Ask Size Click Here: http://t.co/xRqD7XHmKD Also See: $KRS $CNC $OHI $XLU #stockmarket #tradeideas ~
Sourcingstocks.com
26 Apr 15 07:43:37
WELCOME TO OUR PARTY BMO – $ARIA IS UP 33.56% SINCE OUR INITIAL ALERT http://t.co/8YeC3PZTY3
chartguy89
26 Apr 15 07:42:23
ARIA +0.99% Stock Charts $ARIA Ariad Pharmaceuticals Inc. (NASDAQ) Last Updated: 04/26/2015 09:42:23 ARIA Stoc http://t.co/PzBEyV1FBi
BioInvestor
26 Apr 15 05:46:52
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Sam
25 Apr 15 16:26:08
A few more of interest: $AMBA $ADXS $AAL $AMGN $AMZN $ARIA $ARRY $ASHR http://t.co/bh923uwZvq http://t.co/iwkcBDdUYA
PolgarStocks
25 Apr 15 13:41:07
$BLTA Stock Message Board Updated Saturday, April 25, 2015 4:07:03 PM $ARIA $EFA $MS $CLF http://t.co/caoMaPn5YK
nasdaqfan
25 Apr 15 11:53:45
$EFA stock Company Info Click Here: http://t.co/jzfGx4jmKO Also See: $AEO $XLP $KR $ARIA #stockmarket #tradeideas ~
PolgarStocks
25 Apr 15 10:37:38
$IJR News Updated Saturday, April 25, 2015 1:07:02 PM $PG $SSO $COP $ARIA http://t.co/8PdT024p9Y
Investors Hangout
25 Apr 15 10:24:35
ARIAD Pharmaceuticals Inc. $ARIA | Stock Message Board - Investors Hangout http://t.co/b988E1D7nE
EquitiesOnly
25 Apr 15 09:51:14
#Ariad Pharmaceuticals given $14.00 PT by BMO Capital Markets. buy rating. http://t.co/FZ3aNAWTgG $ARIA #ARIA @addthis
Investors Hangout
25 Apr 15 09:45:28
$ARIA stock Current Price Click Here: http://t.co/nBtIFggWir Also See: $RLGT $POOL $ENZ $FRAN #stockmarket #tradeideas ~
IH News Desk
25 Apr 15 09:27:32
$MGM stock Ask Click Here: http://t.co/jKZyAq8uCq Also See: $BMTC $KZ $ARIA $CSL #stockmarket #tradeideas ~
Rosner Stocks
25 Apr 15 08:33:44
$FSLR Last Price Updated Saturday, April 25, 2015 10:59:25 AM $SWC $EEM $XLE $ARIA http://t.co/T5MYQsXhOh
IH News Desk
25 Apr 15 07:52:05
$ARIA Last Price Updated Saturday, April 25, 2015 10:10:56 AM $SQQQ $XLP $DBC $HD http://t.co/2mjZJV3PLh
Phil Martin
25 Apr 15 07:41:09
$ARIA http://t.co/nXNs9bYSR7
PolgarStocks
25 Apr 15 05:33:12
$IJH Investor Opinions Updated Saturday, April 25, 2015 08:07:04 AM $SWKS $ATVI $NEM $ARIA http://t.co/Gh0usw65gt
Rosner Stocks
25 Apr 15 04:30:40
$QLD Stock Price Updated Saturday, April 25, 2015 06:59:24 AM $HAL $ARIA $WMT $XBI http://t.co/skw9YTpubp
Rosner Stocks
25 Apr 15 04:30:37
$MYEC Stock Message Board Updated Saturday, April 25, 2015 06:59:24 AM $SPXL $ARIA $CTIX $XLP http://t.co/gmORSlkvuJ
StockenheimerSchmidt
25 Apr 15 04:26:37
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PolgarStocks
25 Apr 15 03:31:40
$ACWI Opinions Updated Saturday, April 25, 2015 06:07:03 AM $TLFX $SBUX $ORCL $ARIA http://t.co/EoCT5TVWXi
PolgarStocks
25 Apr 15 03:31:38
$MS Opinions Updated Saturday, April 25, 2015 06:07:03 AM $CTIX $TNA $ARIA $SMH http://t.co/t8oC3fJSzI
Rosner Stocks
25 Apr 15 03:30:06
$ARIA Filings Updated Saturday, April 25, 2015 05:59:23 AM $USO $BIDU $THCZ $GE http://t.co/7rtr25SZzI
				
				
By  +Follow January 27, 2014 8:25AM
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