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

By  +Follow January 27, 2014 8:25AM
Tickers Mentioned:

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
Phil Martin
21 Oct 14 04:15:37
$ARIA http://t.co/ZzBdIyEb3k
21 Oct 14 04:08:42
Parabolic Sar Buy Signals 1/4 $AA $ABB $ADM $AEP $AFL $AKRX $ARIA $BIG $BLMN $CA $CBG $CBSO $CCI $CCL $CELG $CHTR http://t.co/Q7JOnVLVsF
Stock Forums
21 Oct 14 03:30:50
$EWJ 52Wk High Click Here: http://t.co/OHcbhaiHNI Also See: $RSH $ARIA $UNH $STRP ~
21 Oct 14 03:03:32
Weekly MidCap #Stocks Trend $SHLD $TMHC $NSM $ARIA $OCN $LII $LEN $DPZ $DHI $PHM $FEYE $THRX $INCY $ADS $ALK @ http://t.co/tf79gD96D3
21 Oct 14 03:03:10
Weekly MidCap #Stocks Performance $SHLD $SD $AAL $TMHC $DAL $UAL $NSM $CHK $ARIA $LE $URI $XLNX $OCN more@ http://t.co/tf79gD96D3
Investors Hangout
21 Oct 14 01:59:32
$EIRL EOD Data Click Here: http://t.co/KKU1YpRBOg Also See: $WMT $ARIA $SMH $FSLR ~
Chasing Stars
20 Oct 14 23:16:13
$CSCO Change Click Here: http://t.co/k7ceqVxAa6 Also See: $XLP $TMF $UBT $ARIA ~
Chasing Stars
20 Oct 14 22:54:36
$CQP Stock Message Board Click Here: http://t.co/2SFdxFNgvf Also See: $IBB $ARWR $EWN $ARIA ~
Green Room
20 Oct 14 22:36:17
Watchlist for tomorrow $BBRY $ARIA $DRYS $KTOS $PLUG
Luke Lee
20 Oct 14 22:30:43
RT @RNA_Biotech: 9 takeover targets: $ACHN $ARIA $BMRN $INCY $ISIS $JAZZ $MDVN $PBYI $SLXP http://t.co/eFtDGvHG8T
Investors Hangout
20 Oct 14 22:20:50
$CLF Yield Click Here: http://t.co/C9YFnNGWOX Also See: $CYBR $FLY.V $EPI $ARIA ~
20 Oct 14 22:00:04
20 Oct 14 21:06:10
Our Penny Stock Picks Gained 371% In 2 Weeks! Get Our Next Pick Early: http://t.co/z2noBUWrEP $FASC $ARIA $TUCN
Chasing Stars
20 Oct 14 20:19:30
$ARIA Financials Click Here: http://t.co/JIAxgTKzn1 Also See: $HYG $ISNS $BBBY $RSH ~
Investors Hangout
20 Oct 14 20:18:16
$ARIA Ideas Click Here: http://t.co/GPvNtihEQr Also See: $CENX $CAT $IBM $RSX ~
Investors Hangout
20 Oct 14 20:18:05
$ARIA Message Board Posts Click Here: http://t.co/6WH7yQkKmW Also See: $BAC $AA $WESC $XLY ~
Rosner Stocks
20 Oct 14 20:17:46
$ARIA EOD Data Click Here: http://t.co/XIOlDPw5Zp Also See: $REGN $GE $CAT $GUR ~
Stock Forums
20 Oct 14 20:11:28
$ARIA % Change Click Here: http://t.co/diR353Cmwj Also See: $XLE $IBM $MMM $T ~
20 Oct 14 19:28:00
Tues watch: Momo: $SCOK, $CERS, $DRYS, $FREE, $NQ, $IBIO, $SPEX Chart: $ENTA, $RCON, $PACB, $DPW, $ARIA, $MFA, $RSH, $RDNT, $RIC, $ACCO
20 Oct 14 18:57:54
New post: 10/21 Watch List http://t.co/eHGKLv0Dhp $SCOK $ESI $NQ $SHLD $ARIA $BIOF $SHOR $NLNK
20 Oct 14 18:30:53
Harvey Berger, CEO of $ARIA another guy who was funded by the scamtastic David Blech & amazingly still has the same job.
Investing News
20 Oct 14 17:55:24
Today’s Recap & Some Stocks Setting Up $GLOG, $BBRY, $WFT, $ARIA. http://t.co/VqLKXgvaqa
Ruggero Respigo
20 Oct 14 17:44:23
Ruggero Respigo : Today’s Recap & Some Stocks Setting Up $GLOG, $BBRY, $WFT, $ARIA. via /r/stocks http://t.co/3PI7CjXG8F
20 Oct 14 17:24:39
Our Penny Stock Picks Gained 371% In 2 Weeks! Get Our Next Pick Early: http://t.co/z2noBUWrEP $FASC $ARIA $TUCN
G. Thomas Lackey Jr
20 Oct 14 17:19:08
October 20, 2014 RS Movers http://t.co/V3Mon3pcte $ITB $IYW $LUV $AEGR $ARIA $SSYS $CPHD $LEN $UNP $CBST $NFLX $CTSH $TYC $INTC
Dan Forman
20 Oct 14 17:01:04
@afmarko99 @afmarko99: Rbc:" $ARIA Iclusig TRx/NRx are 101/41, +26/+5% wk/wk, $PCYC Imbruvica TRx 1196, +11% wk/wk; NRx 441, +7% wk/wk…"
DayTrading Power
20 Oct 14 16:33:57
Live chatroom results today: went 29/32 for ALOT of $$$$ great day. Traded $SHLD $EBAY $MSFT $NQ $ARIA $BBRY. Are you trading with Power?
20 Oct 14 16:22:42
@afmarko99 $ARIA now that you are in it means that the stock will tank. J/k
20 Oct 14 16:22:25
ARIAD Pharmaceuticals Inc. (ARIA) Jumps 6.62% on October 20 $ARIA http://t.co/s0oO9Jm6Jm
20 Oct 14 16:03:19
MidCap #Stocks Trend $SHLD $LII $TSO $ARIA $NVR $HAS $TMHC $THRX $GMCR $GEF $DF $HPT $IP $LEN $NSM $ALK $DNKN @ http://t.co/tf79gD96D3
20 Oct 14 16:03:02
MidCap #Stocks Performance $SHLD $LII $TSO $ARIA $RCL $NVR $HTZ $JCP $UAL $LUV $AAL $SD $WTW $GCI $HAS more@ http://t.co/tf79gD96D3
Mark Romero
20 Oct 14 15:54:04
Today’s Recap & Some Stocks Setting Up $GLOG $BBRY $WFT $ARIA $IBIO http://t.co/tKxn5avvd9
Trader News Daily
20 Oct 14 13:23:50
Get reviews of top trading websites at http://t.co/sJnBwtOUTE. Sign-up bonuses available. Related: $MJNA $SD $ALU $GRPN $ARIA $RSH $GTATQ
Victor Roberts, MD
20 Oct 14 13:13:56
Commented on StockTwits: GANN angle magic! Predicted $ARIA price action correctly today! 6.05 was R! Couldn't bre... http://t.co/oCFA1lymVF
20 Oct 14 13:00:52
MidCap #Stocks Trend $SHLD $LII $TSO $ARIA $NVR $TMHC $GMCR $DF $THRX $HPT $LEN $DNKN $PHM $TE $ALK $CMS $AAP @ http://t.co/H27z0JgFGk
20 Oct 14 13:00:35
MidCap #Stocks Performance $SHLD $LII $WTW $TSO $ARIA $HTZ $UAL $RCL $NVR $HAS $GCI $LUV $QEP $TMHC $MDR more@ http://t.co/tf79gD96D3
20 Oct 14 12:58:30
After Massive Gains On Penny Stock Picks, another New Pick Is Coming! Check it out: http://t.co/lWd4jUXeCy $FASC $ARIA $TUCN
20 Oct 14 12:37:12
Eyes still on $ARIA for a HOD push.
Mark Romero
20 Oct 14 12:34:13
$ARIA In for 500 shares
20 Oct 14 12:27:30
$ARIA Strong all day http://t.co/2DRYdhc2Cq
20 Oct 14 12:21:11
$ARIA looks good for continuation imho
Victor Roberts, MD
20 Oct 14 12:10:06
$ARIA Where is "tornado" @TravelerRob? Fun to see his posts lately. He should start add to his long position instead of hoping to see low 4s
20 Oct 14 12:07:20
$ARIA looking to snap HOD here
20 Oct 14 12:04:39
$ARIA new HOD? HUGE VOLUME!!!! #news #breakingnews #cnbc $lake #DallasEbola $shpg $cmrx $tkmr $ibio $bcrx $SRPT $NLNK #ZMapp
20 Oct 14 11:37:51
$ARIA - getting ready to rally again! #news #breakingnews #cnbc $lake #DallasEbola $shpg $cmrx $tkmr $ibio $bcrx $SRPT $NLNK #ZMapp
20 Oct 14 11:07:36
@Drragu $ARIA how can you tell that there are no shares to short currently? Thx
Kenneth Meyerson
20 Oct 14 10:41:14
RT @TomSilver39: Rbc:" $ARIA Iclusig TRx/NRx are 101/41, +26/+5% wk/wk, $PCYC Imbruvica TRx 1196, +11% wk/wk; NRx 441, +7% wk/wk…"
Investors Hangout
20 Oct 14 10:36:23
$IWM News Click Here: http://t.co/mInqqMNmsE Also See: $BRK/B $ARIA $EWL $BABA ~
Susanta Bera
20 Oct 14 10:02:04
RT @Drragu: Commented on StockTwits: $ARIA ICLUSIG Sales are improving! http://t.co/rJjaKF2nwU http://t.co/stDbqO6mRc
Victor Roberts, MD
20 Oct 14 09:59:52
Commented on StockTwits: $ARIA ICLUSIG Sales are improving! http://t.co/rJjaKF2nwU http://t.co/stDbqO6mRc
By  +Follow January 27, 2014 8:25AM



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