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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.

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Results for ARIA
Option Jesus
29 May 15 13:05:23
RT @CBOE: DRJ on @CBOETV: market sell-off, bond yields down, GDP data, @optionMonster buys in $ARIA on ASCO announcements http://t.co/oeEKO…
Sterling M Holmes
29 May 15 12:22:25
CBOE: DRJ on CBOETV: market sell-off, bond yields down, GDP data, optionMonster buys in $ARIA on ASCO announcements http://t.co/ydgLC33lBE
CBOE
29 May 15 12:20:18
DRJ on @CBOETV: market sell-off, bond yields down, GDP data, @optionMonster buys in $ARIA on ASCO announcements http://t.co/oeEKOSONL9
Charles Zinnel
29 May 15 12:19:46
$MDFZ up 86% on huge #Duke University news! $achn $gild $pfe $jnj $mrk $gsk $aria $ctic $onty #stocks #ASCO15 http://t.co/0BnqN5h7C3
Charles Zinnel
29 May 15 12:18:32
$MDFZ up 86% on news! $achn $gild $pfe $jnj $mrk $gsk $aria $ctic $onty #stocks #ASCO15
George_LakersNation
29 May 15 12:10:59
$OCLG #ACQUISITION could hit any day now $ADMD $MINE $NHMD $CYTR $ARIA $GALE #healthcare #stocks #alert #pennystocks http://t.co/s4rGFJ5NBK
CBOE TV
29 May 15 12:08:56
DRJ video: market sell-off, bond yields down, GDP data, @optionMonster buys in $ARIA on ASCO announcements http://t.co/ytlxf59ORl
CNBC Halftime Report
29 May 15 11:51:50
Top trades to go as May wraps up http://t.co/UXfi6R9t73 $DXJ $JCP $ARIA $SBUX http://t.co/vAXAvhHnkT
Investors Hangout
29 May 15 11:46:39
TQQQ ProShares UltraPro QQQ Dividend http://t.co/odk3B6aP7k $TQQQ $ARIA $VBLT $JNUG #TQQQ #stockmarket #invest
IH News Desk
29 May 15 11:40:29
IBB Biotech iShares E.P.S. http://t.co/nGD09tDSvR $IBB $ARIA $IBB $FV #IBB #share #stock
Kevin F.
29 May 15 11:36:15
@CashRocket deciding between that and $ARIA currently.... hmmm
IH News Desk
29 May 15 11:32:09
ARIA ARIAD Pharmaceuticals, Inc. Bid Size http://t.co/G9hXgcWwPF $ARIA $RNG $HYG $TASR #ARIA #invest #investing
Breaking News
29 May 15 11:22:02
$JCP $ARIA $SBUX: Top trades to go as May wraps up: http://t.co/rze4DwSFms
TV_Trading Ideas
29 May 15 11:00:19
Bullish Reversal $ARIA http://t.co/iAYeQkMzXY
Charles Zinnel
29 May 15 10:54:15
$MDFZ up 75%!!!! $achn $gild $pfe $jnj $mrk $gsk $aria $ctic $onty #stocks #ASCO15
Small Cap Markets
29 May 15 10:47:54
RT @Momentum_PR: Most talked about companies going into afternoon. #Trending #Stocks $HRTX $UWTI $HUM $ESI $ARIA $AMZN $CI $EBAY $AET $XIV
dougheuring
29 May 15 10:47:33
JMP $CELG $ARIA $KERX $MDVN http://t.co/QZztbcVRi9
Long-Short Hedgie
29 May 15 10:46:01
#Bot Jul 10 Calls $ARIA
Momentum PR
29 May 15 10:41:30
Most talked about companies going into afternoon. #Trending #Stocks $HRTX $UWTI $HUM $ESI $ARIA $AMZN $CI $EBAY $AET $XIV
Teddy The wonder Dog
29 May 15 10:32:51
My quadruple As working: $ALTR $ARIA $ARRY $ATML love stocks that start with A
Phil Martin
29 May 15 10:30:35
$ARIA http://t.co/eORfduisLa
Marto Hoary
29 May 15 10:19:49
RT @WrigleyTom: Some Biotech related | nHod $ESPR $HRTX $BCRX $CLVS $JUNO $PTCT $ACHN $RPTP $KITE $XON $BLUE $BPMC $OVAS $ONCE $ATRA $ARIA …
Amanda
29 May 15 10:16:04
RT @WrigleyTom: Some Biotech related | nHod $ESPR $HRTX $BCRX $CLVS $JUNO $PTCT $ACHN $RPTP $KITE $XON $BLUE $BPMC $OVAS $ONCE $ATRA $ARIA …
HappyInAustin
29 May 15 10:10:14
RT @WrigleyTom: Some Biotech related | nHod $ESPR $HRTX $BCRX $CLVS $JUNO $PTCT $ACHN $RPTP $KITE $XON $BLUE $BPMC $OVAS $ONCE $ATRA $ARIA …
Ambiguous
29 May 15 10:08:48
RT @WrigleyTom: Some Biotech related | nHod $ESPR $HRTX $BCRX $CLVS $JUNO $PTCT $ACHN $RPTP $KITE $XON $BLUE $BPMC $OVAS $ONCE $ATRA $ARIA …
Time=Best Stock
29 May 15 10:07:31
RT @WrigleyTom: Some Biotech related | nHod $ESPR $HRTX $BCRX $CLVS $JUNO $PTCT $ACHN $RPTP $KITE $XON $BLUE $BPMC $OVAS $ONCE $ATRA $ARIA …
Tom Wrigley
29 May 15 10:07:12
Some Biotech related | nHod $ESPR $HRTX $BCRX $CLVS $JUNO $PTCT $ACHN $RPTP $KITE $XON $BLUE $BPMC $OVAS $ONCE $ATRA $ARIA $ENTA $ADXS $LBIO
Ryan Ferguson
29 May 15 10:02:34
$ARIA nice start close over 9.20 would be gold. http://t.co/yMXmV1YPs5
FlowerPower
29 May 15 10:02:03
#FastMoneyEspresso FINAL CALLS: Jim Lebenthal —> buy $JCP, goes through $9 Dr J —> buy $ARIA Josh Brown —> buy $SBUX
FonsieTrader
29 May 15 10:00:18
$ARIA Gaining traction! stay tuned
Alexander Morris
29 May 15 09:49:35
$ARIA: At 1WkHIGH=9.20, hits:1, Rng:4%, ch:+2.2%, 0NearHi, allTFs+, medFlt:167M, HiPctSht[27%:8d], DyVol:2.11M:1x:0.4x, DyRng:2.7%:1.5x:1.1x
Kevin F.
29 May 15 09:32:01
$ARIA #1 on my watchlist rn, still holding two positions $MYL $RCPT
Capital Market Labs
29 May 15 09:13:16
$ACOR vs. $NLNK vs. $EBS vs. $ARIA Compared Across 9 Critical Measures http://t.co/nH3z82mI9h http://t.co/t1zhKpa6oj
Stock Dawgzz
29 May 15 08:37:10
Our Pick On $VGTL Closed Up 28.57% Yesterday & Saw It's Highest Volume In 10 Years! Big News: http://t.co/5QjMLZ78Yd $FASC $ARIA $TUCN
Stockaholics
29 May 15 08:14:45
Our Penny Stock Pick On $THCZ Is Up 570.77% For Platinum Members! Big Update: http://t.co/dXhKtfZvCq $FASC $ARIA $TUCN
Stock Rocket
29 May 15 08:11:59
Our Stock Alerts Gained Over 1300% In Less Than 3 Months! See Our New Picks: http://t.co/keLIhbbQwg $FASC $ARIA $TUCN
Quantcha
29 May 15 08:11:50
Covered Call Alert: ARIAD PHARMACEUTICALS $ARIA returning up to 37.61% through 20-Nov-2015 http://t.co/lzGgPoJfcW
Exit 98
29 May 15 07:46:58
$ARIA some chatter out ther fwiw
Phil Martin
29 May 15 07:46:44
$ARIA http://t.co/63ie7Ks01z
Market Int Center
29 May 15 07:46:02
Ariad Pharmaceuticals $ARIA Showing Resistance Near $9.16 ( http://t.co/IR8Gvgjjlg )
Media Sentiment
29 May 15 07:42:00
$ARIA received a new alert. Find out why at http://t.co/nZwqReM0tj #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 174
Steve*Dakota*Happas
29 May 15 07:41:59
$ARIA huge call volume on the july 10s-now that AlexDenner is in control maybe he finally got his buyout done! @optionmonster @petenajarian
Ani Anirudhan
29 May 15 07:39:51
RT @WallStJesus: $ARIA JULY CALL FLOW
Ani Anirudhan
29 May 15 07:39:38
RT @WallStJesus: $ARIA JULY 10 CALL ACTION TODAY -- BIO BEWARE
MoneyMakingStocks
29 May 15 07:38:58
RT @WallStJesus: $ARIA JULY 10 CALL ACTION TODAY -- BIO BEWARE
wl_zk
29 May 15 07:38:52
$ARIA nhod, coiled
BATTLE THE BTK
29 May 15 07:38:49
RT @WallStJesus: $ARIA JULY CALL FLOW
JE$US
29 May 15 07:38:46
$ARIA JULY 10 CALL ACTION TODAY -- BIO BEWARE
dailystockplays.com
29 May 15 07:33:39
ARIA Unusual Call Buying http://t.co/d7WueYSlWc $ARIA
StockenheimerSchmidt
29 May 15 07:32:40
Our Pick On $VGTL Is Moving Fast & Broke It's Record Volume Level Yesterday! Special Update: http://t.co/RdlD84irlO $FASC $ARIA $TUCN
				
				
By  +Follow January 27, 2014 8:25AM
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