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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.


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Results for ARIA
Business Headlines
21 Aug 14 21:04:28
$ARIA: Why Ariad Pharmaceuticals (ARIA) Stock Is Down Today http://t.co/OOMnbCbV6j http://t.co/fOZhTWxzE5
Colin Macleod
21 Aug 14 20:16:03
August 21 2014 Chart Patterns: Channel Down http://t.co/9d3wcxJQ28 $ARIA $JNPR $GNC $LPX $EDU $TIBX $CGA $AEGR
Colin Macleod
21 Aug 14 18:56:57
August 21 2014 Recent Insider Buying http://t.co/fnZyvSZaOl $CLF $FOLD $ARIA $MHR $GNC $OPK $PM $AEGR $ARCC $REXX
Gotham City Capital
21 Aug 14 18:50:47
RT @SolarMelt: $ARIA has a beautiful double bottom, but she's going back down. Overbought, Money Flow Negative, Distribution ...
Solar Melt
21 Aug 14 18:44:24
$ARIA has a beautiful double bottom, but she's going back down. Overbought, Money Flow Negative, Distribution ...
OTPicks.com
21 Aug 14 13:35:09
http://t.co/stbZjDRYAm Jake13: $ARIA Barchart Opinion Click here to find out if: Jake13 http://t.co/fehffFA4oV http://t.co/stbZjDRYAm
Biz Headlines
21 Aug 14 13:04:18
$ARIA: ARIAD PHARMACEUTICALS INC Financials http://t.co/TljHm13Tis http://t.co/srIuHtpY66
Kenneth Meyerson
21 Aug 14 12:47:18
On the minute chart, right before the spike in price, you actually see (as a visual cue) the spike in the money flow. #cool $ARIA
Kenneth Meyerson
21 Aug 14 12:32:46
RT @TheSkeptic21: @PortableRockArt Likely accumulation ahead of PRAC/CHMP positive outcome. $ARIA
Stockaholics
21 Aug 14 12:19:32
LGBS up 42.86%! News update & New Pick Coming: http://t.co/LfDGSIfVSV $FASC $ARIA $TUCN
The Skeptic
21 Aug 14 11:38:01
@PortableRockArt Likely accumulation ahead of PRAC/CHMP positive outcome. $ARIA
Kenneth Meyerson
21 Aug 14 11:31:32
RT @afmarko99: $ARIA Failed $6.20 breakout. Retesting support.
Kenneth Meyerson
21 Aug 14 11:24:32
A positive money-flow in the context of lower prices....accumulation before the next breakout? $ARIA
WallStreet
21 Aug 14 11:14:58
$ARIA - Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA) Director Alexander Denner Acquires Shares Indirectly - http://t.co/y9SMdLnEEY
Stock News Headlines
21 Aug 14 11:04:24
$ARIA: ARIAD Pharmaceuticals Inc Earnings Call scheduled for 8:30 am ET today http://t.co/25b32yXJMX http://t.co/x5Z1NDvhjj
Veniamin Kofman
21 Aug 14 10:53:17
$ARIA This is officially the worst investment I made last year. Bought october last year and it is pretty much flat.
Investors Hangout
21 Aug 14 10:51:13
DennyT: FOLD Insider Roster $FOLD $ARIA $FEYE $UTRM $DAL http://t.co/QWk6drsFbC
Investors Hangout
21 Aug 14 10:51:11
DennyT: FOLD Insider Roster $FOLD $ARIA $FEYE $UTRM $DAL http://t.co/6LD5QUcKp2
Investors Hangout
21 Aug 14 10:18:27
DennyT: FFFC Industry $FFFC $ARIA $QTMM $CSIQ $XLK http://t.co/y8hhFm0E7G
Investors Hangout
21 Aug 14 10:18:14
DennyT: FFFC Industry $FFFC $ARIA $QTMM $CSIQ $XLK http://t.co/K9ToSjquKK
Jake13
21 Aug 14 10:09:32
$ARIA Barchart Opinion Click here to find out if $ARIA is a buy hold or sell. Watching these stocks. $SDS $TMF http://t.co/lntqL39di1
Companies in News
21 Aug 14 10:04:31
$ARIA: Will GW Pharmaceuticals (GWPH) Miss this Earnings Season? http://t.co/CAHC1b8pcb http://t.co/mlFLw8PJM9
lookn4wins
21 Aug 14 09:37:50
$CVX Candlesticks $CVX Most recent stock chart and technical analysis. $ECAU $AMZN $EFA $FBCD $ARIA $FCEL http http://t.co/5zIa4I0EMe
lookn4wins
21 Aug 14 09:15:47
$NKY Current Price $NKY Most recent stock chart and technical analysis. $FFFC $CSCO $IWM $AEM $ARIA $UNG http: http://t.co/HVb92CnmRB
Mark Romero
21 Aug 14 09:15:32
$ARIA Failed $6.20 breakout. Retesting support.
Business Headlines
21 Aug 14 08:04:29
$ARIA: Stock Highlights: Praxair Inc. (NYSE:PX), Ariad Pharmaceuticals Inc. (NASDAQ ... http://t.co/mFutJqVXXv http://t.co/7YsgVsDSIl
Jeffrey Blake
21 Aug 14 07:31:07
$ARIA Insider Buying: Ariad Pharmaceuticals Director Alexander J. Denner Buys ... http://t.co/JwopSt9Xtq
Investors Hangout
21 Aug 14 07:08:03
Jake13: $ARIA Barchart Opinion Click here to find out if http://t.co/5AY3wdFnTx
Investors Hangout
21 Aug 14 07:08:03
Jake13: $ARIA Barchart Opinion Click here to find out if http://t.co/argPU4BX6a
Market Headlines
21 Aug 14 07:04:35
$ARIA: Stock Highlights: Praxair Inc. (NYSE:PX), Ariad Pharmaceuticals Inc. (NASDAQ ... http://t.co/n0Y96rdHso http://t.co/ARaavSGQb1
Eric Stein
21 Aug 14 07:02:49
Fairly large insider buy at $ARIA, first in very long time #bottom
OTPicks.com
21 Aug 14 06:54:48
http://t.co/ioejVXw2Lr ClayTrader: * * $ARIA Video Chart 8-20-14 * *: ClayTrader http://t.co/cp84D3ymrQ http://t.co/ioejVXw2Lr
OTPicks.com
21 Aug 14 06:54:48
http://t.co/ioejVXw2Lr ClayTrader: * * $ARIA Video Chart 8-20-14 * *: ClayTrader http://t.co/d2iBGL3Aus http://t.co/UUQeeS6eNk
Jake13
21 Aug 14 06:44:47
$ARIA Barchart Opinion Click here to find out if $ARIA is a buy hold or sell. Watching these stocks. $XLP $AMG http://t.co/2Wmk5rA7R6
Eleazar J. Lua
21 Aug 14 06:41:57
$ARIA closes gap and back at it again. Adding here at 6.
Peter Bardens
21 Aug 14 06:00:54
$ARIA Commit To Purchase ARIAD Pharmaceuticals At $3.50, Earn 21.4% Using Options http://t.co/K3uqB0IFHq
Eleazar J. Lua
21 Aug 14 05:47:47
$ARIA
FonsieTrader
21 Aug 14 05:12:22
Parabolic Sar Buy Signals 1/2 $AA $ANN $ARIA $ASNA $ATML $CACB $CERN $CIEN $EMN $EXPR $FAST http://t.co/aE8URGZ4qg
Stock News Guru
21 Aug 14 05:04:28
$ARIA: Will GW Pharmaceuticals (GWPH) Miss this Earnings Season? http://t.co/3VkW2fDMpd http://t.co/uV7Wtj1SLo
US Banking News
21 Aug 14 04:58:46
Insider Buying: Alexander J. Denner Acquires 850,000 Shares of Ariad Pharmaceuticals Stock $ARIA http://t.co/2YElskMZM6
Ticker Report
21 Aug 14 04:44:39
Insider Buying: Alexander J. Denner Acquires 850,000 Shares of Ariad Pharmaceuticals Stock $ARIA http://t.co/lLKRaI8h8I
johanna ihli
20 Aug 14 22:09:42
RT @ClayTrader25: $ARIA Stock Chart Analysis_ 8-20-14 - watch here: http://t.co/9yr1rL9NNr @jimcramer @cnbc @thestreet @SquawkStreet
Stocks in News
20 Aug 14 21:04:27
$ARIA: ARIAD Pharmaceuticals Inc Earnings Call scheduled for 8:30 am ET today http://t.co/YQlAswYsbZ http://t.co/4Ti8nkuejt
OTPicks.com
20 Aug 14 20:52:48
http://t.co/ioejVXw2Lr ClayTrader: * * $ARIA Video Chart 8-20-14 * *: ClayTrader http://t.co/vuSfXlOH5j http://t.co/ioejVXw2Lr
OTPicks.com
20 Aug 14 20:52:48
http://t.co/ioejVXw2Lr ClayTrader: * * $ARIA Video Chart 8-20-14 * *: ClayTrader http://t.co/4KxyJMWRiy http://t.co/ioejVXw2Lr
Stockaholics
20 Aug 14 20:35:02
$GLBH closed up 150% today! Major Update: http://t.co/WFeoEydWra $FASC $ARIA $TUCN
Market Headlines
20 Aug 14 20:04:30
$ARIA: Storm The Castle: ARIAD Pharmaceuticals (ARIA) http://t.co/nn5JfLlSGJ http://t.co/1u7Yt87yvk
Market Compass
20 Aug 14 19:04:35
$ARIA: ARIAD PHARMACEUTICALS INC Files SEC form 8-K, Other Events http://t.co/3IlKdyKr50 http://t.co/SgqwyRqMwq
Mark Romero
20 Aug 14 17:26:59
$GTAT & $GLOG Stops, Short $BITA – Bitauto Holdings & $ARIA Re-Evaluation http://t.co/jgylLOoda3 #stocks #stockmarket
Mark Romero
20 Aug 14 16:15:08
$ARIA I don't want to be considered a spammer but I really think my latest analysis nailed it. Expect a nice move if $6.20 breaks
				
				
By  +Follow January 27, 2014 8:25AM
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