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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
Tug
31 Aug 15 06:17:55
Watchlist for Mon 8/31 $BLFS $MDCO $VTL $ARIA
Home Day Trading
31 Aug 15 06:17:53
Stocks in play lunes 31 de agosto 2015: $AAPL $FB $TWTR $TVIX $SUNE $MDCO $VTL $ARIA $NFLX $ACI $FCX $SDRL $BLFS http://t.co/X6MfMc85Xe
Fat_Cat_Trader
31 Aug 15 06:17:42
$VTL On Watch. $FCX & $ARIA for Fades
Warrior Trading News
31 Aug 15 06:16:56
$SPY $BLFS $SUNE $MDCO $VTL $SDRL $VIX $QQQ $AAPL $BIG $SPX $FB $ACI $MDCO $ARIA $TWTR $ALNY $PLNT $FOLD https://t.co/5MawtNAzSy
shelton williams
31 Aug 15 06:16:18
$ARIA Volume increasing,price dropping hard.Will open down 5-10% already and continue lower.Get a clue. pre market http://t.co/E3wy9GdQEv
Kristina Duering
31 Aug 15 06:16:17
@srqstockpicker Yup, that's perfect ! haha ;) Long $ARIA and I like lemonade!!!
StockHideout
31 Aug 15 06:15:22
$ABOT Monday Mega Alert Fresh News Just Out WOW: http://t.co/M8i22sMx6x $SIRG $CRGP $TBEV $AVXL $PPHM $MYEC $ARIA $VTGL $WMIH $FNMA $ABOT
OTC FIRE
31 Aug 15 06:15:07
$ABOT Monday Mega Alert Fresh News Just Out WOW: http://t.co/9T4w6ot0qI $SIRG $CRGP $TBEV $AVXL $PPHM $MYEC $ARIA $VTGL $WMIH $FNMA $ABOT
Stock Chat and Forum
31 Aug 15 06:14:59
$ABOT Monday Mega Alert Fresh News Just Out WOW: http://t.co/Uv0xFrqfae $SIRG $CRGP $TBEV $AVXL $PPHM $MYEC $ARIA $VTGL $WMIH $FNMA $ABOT
Kristina Duering
31 Aug 15 06:13:10
RT @BritonRyle: reco'd $aria at $8.78 in Feb 14. traded $3.78 on calls. A $10 buyout price would give us 100% gain
Kristina Duering
31 Aug 15 06:12:03
RT @srqstockpicker: $aria (perfect timing) Ariad Pharmaceuticals Sees Large Increase in Short Interest (ARIA) http://t.co/KzFGyptPyO
The Stock Ninja
31 Aug 15 06:09:08
Updated Watches 8/31/15: $ARIA, $ACI, $VTL, $MPO, $STXS Full writeup: http://t.co/S2NeUvKrhe #stocks #trading #market $STUDY
Joshua B
31 Aug 15 06:09:05
$aria (perfect timing) Ariad Pharmaceuticals Sees Large Increase in Short Interest (ARIA) http://t.co/KzFGyptPyO
Dante Vincent
31 Aug 15 06:07:46
@ariadinvestor Sweet weekend hold short on $ARIA! Thanks for the pump and beer money! #idiot
Time=Best Stock
31 Aug 15 06:06:30
RT @WrigleyTom: % Movers 9AM $BTH +104% $BLFS +43 $MDCO +19 $VTL +18 $RXII +15 $ALNY +6 $SUNE +5 $UVXY +3 $TWTR +3 $CFMS -14% $SDRL -6% $…
Tom Wrigley
31 Aug 15 06:06:06
% Movers 9AM $BTH +104% $BLFS +43 $MDCO +19 $VTL +18 $RXII +15 $ALNY +6 $SUNE +5 $UVXY +3 $TWTR +3 $CFMS -14% $SDRL -6% $ARIA -5 $NFLX -2
The Cardiac Kid
31 Aug 15 06:05:16
136: $ARIA WILL EVENTUALLY SELL... They just need to: 136 http://t.co/fyVhGLEKy8
The Cardiac Kid
31 Aug 15 06:05:16
crudeoil24: $ARIA down in PM. > Like you stated:: crudeoil24 http://t.co/WCoA6iGI0Z
Ticker Candy
31 Aug 15 06:05:15
$VTL $ARIA $FCX $BGSN $MPO $USMN on watch.
Pristine Trading
31 Aug 15 06:05:06
ESP Gap Up: $ATL $TWTR $SUNE $RJET $PSX $MDCO $JCP ESP Gap Down: $SCCO $OPK $EFOI $ARIA $WLL $SDRL $LINE $FCX
Briton Ryle
31 Aug 15 06:03:52
reco'd $aria at $8.78 in Feb 14. traded $3.78 on calls. A $10 buyout price would give us 100% gain
Maio Group
31 Aug 15 06:03:40
Heading to the airport, but watching $BLFS $VTL $ARIA $MDCO $STXS $TWTR this a.m
Briton Ryle
31 Aug 15 06:00:33
$aria ripped 40% on Friday, sweet
Christopher Angus
31 Aug 15 06:00:03
Premarket most declined stocks: $CFMS, $LINE, $ARIA, $LNCO, $YNDX, $ERIC, $TQQQ, $NFLX, $TSLA, $NK
Christopher Angus
31 Aug 15 06:00:02
Premarket most active stocks: $MDCO, $AAPL, $TVIX, $VTL, $FB, $XIV, $NFLX, $QQQ, $ARIA, $SQQQ
Trending Articles SA
31 Aug 15 06:00:01
Premarket Biotech Digest: Pump-And-Dumps, MannKind DTC Campaign, Opdivo ODD http://t.co/G4IZCIVJn8 $AEGN $ALPMY $AMGN $ARIA $ARRY $ATNM
Momentum PR
31 Aug 15 05:59:24
Here's some of the most #Trending companies among #Investors before the open. $ACI $ALNY $ARIA $TWTR $MDCO $PLNT $FOLD $EXC $ICPT $PYPL
Spartan Stocks
31 Aug 15 05:56:33
New Post: Morning Watchlist 8/31/15 http://t.co/82TeAiteyV $BLFS $VTL $ARIA $STXS
Biotech Investor
31 Aug 15 05:55:29
Premarket Biotech Digest: Pump-And-Dumps, MannKind DTC Campaign, Opdivo ODD http://t.co/hTk3nlPfHF $AEGN $ALPMY $AMGN $ARIA $ARRY $ATNM
Healthcare Stocks
31 Aug 15 05:55:29
Premarket Biotech Digest: Pump-And-Dumps, MannKind DTC Campaign, Opdivo ODD http://t.co/IFX1J4J9HW $AEGN $ALPMY $AMGN $ARIA $ARRY $ATNM
Quick Stock Ideas
31 Aug 15 05:55:29
Premarket Biotech Digest: Pump-And-Dumps, MannKind DTC Campaign, Opdivo ODD http://t.co/qHQawIcSqS $AEGN $ALPMY $AMGN $ARIA $ARRY $ATNM
Seeking Alpha
31 Aug 15 05:55:28
Premarket Biotech Digest: Pump-And-Dumps, MannKind DTC Campaign, Opdivo ODD http://t.co/gOaabioLtK $AEGN $ALPMY $AMGN $ARIA $ARRY $ATNM
Jea Yu
31 Aug 15 05:48:19
$VTL $TWTR $MDCO $ARIA charts http://t.co/7w74qSKAty
Etalon Investment
31 Aug 15 05:46:54
RT @inelegantinvest: Baxalta Attempts To Bulk Up With Ariad To Avoid Shire Advances http://t.co/ABsUFUugFS $BXLT $ARIA $SHPG $BAX
PolgarStocks
31 Aug 15 05:46:35
TROV TrovaGene, Inc. Company Info http://t.co/rDzWlVNURa $TROV $WMT $ARIA $VZ #TROV #invest #stocks
Shiraz Lakhi
31 Aug 15 05:46:34
Pre-Open Watchlist: Fridays Biggest VOLUME-BACKED %Gainers in HEALTHCARE #Stocks $ARIA $CSBR $AXGN $INO ++ Full List http://t.co/xMkwN5nu1x
il Capitano
31 Aug 15 05:44:51
$BLFS $EOX $MPO $SUNE $ARIA $MDCO lets go
OTPicks.com
31 Aug 15 05:35:21
http://t.co/iiPmfiuxIg bobirw: Cover 2000 $ARIA at 9.35 +.41: bobirw http://t.co/rRFIUwUyLD http://t.co/iiPmfiuxIg
OTPicks- OnTimePicks
31 Aug 15 05:35:19
http://t.co/lqld4EgBgy bobirw: Cover 2000 $ARIA at 9.35 +.41: bobirw http://t.co/tVCPYS2li9 http://t.co/lqld4EgBgy
OTPicks.com
31 Aug 15 05:35:16
http://t.co/y0P0rvA8JD bobirw: Cover 2000 $ARIA at 9.35 +.41: bobirw http://t.co/XcA622cF3d http://t.co/y0P0rvA8JD
Somanath
31 Aug 15 05:34:26
Jake132013 : ARIA ARIAD Pharmaceuticals, Inc. Short Sales http://t.co/YpCn6iDGqU $ARIA … http://t.co/Q35CK3t666) http://t.co/WrHoEtYscD
Jake13
31 Aug 15 05:32:17
ARIA ARIAD Pharmaceuticals, Inc. Short Sales http://t.co/SNw78ORUgk $ARIA $EFA $UPRO $TROV #ARIA #stockmarket #investing
lookn4wins
31 Aug 15 05:32:06
BABA Alibaba Group Holding Ltd. Tick http://t.co/c2lVhby1gr $BABA $EDZ $ENR $ARIA #BABA #investing #stock
Stock Trade Alerts
31 Aug 15 05:30:10
#PreMarket $ARIA, $EXTR, $NBL, $MU Benzinga's Top Losers - http://t.co/9LdqSi2D7j ~ via @AlertTrade
BenzingaWire
31 Aug 15 05:27:03
$ARIA, $EXTR, $NBL, $MU Benzinga's Top #PreMarket Losers - http://t.co/ZapHL6Rpq6
Inelegant Investor
31 Aug 15 05:20:20
Baxalta Attempts To Bulk Up With Ariad To Avoid Shire Advances http://t.co/ABsUFUugFS $BXLT $ARIA $SHPG $BAX
Breaking News Now
31 Aug 15 05:17:03
$ARIA: Ariad Pharmaceuticals (ARIA) Jumps: Stock Moves Up 41.7%: http://t.co/OXFOUyw0Se
Stocks News&Markets
31 Aug 15 05:16:44
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Stephen s
31 Aug 15 05:12:00
RT @DDNotesMaker: Looking for due diligence reports on $NTGL $PLKD $DKAM $ARIA $HJOE $WMIH $RUN ? Go to http://t.co/JPO7bvYPYu
Breaking News
31 Aug 15 05:07:03
$ARIA: ARIAD Skyrockets More than 40% Following Buyout Rumors: http://t.co/ce8F9E59sr
				
				
By  +Follow January 27, 2014 8:25AM
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