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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
Irma Doucet
1 Oct 14 10:31:17
$ARIA Pre-Earnings Bulls Charge Ariad Pharmaceuticals, Inc. (ARIA) http://t.co/dLA11BlpOE
Harry Walkman
1 Oct 14 10:31:17
$ARIA Why Ariad Pharmaceuticals, Inc. Stock Plunged 11% in 2014 http://t.co/YFRsLAJnsF
Victor Roberts, MD
1 Oct 14 08:11:10
$ARIA Block trade of 2,50,000 shares @ 5.34 at 10:33:36 ! Looks like New big boys/ Institutions purchase! http://t.co/ZW5EBXQQHy
1 Oct 14 08:08:44
$ARIA -surging on lung cancer news! Squeeze!! $pfe $jnj $dndn $ctic $kerx $GSK #Ebola $aapl $mrk #cnbc #news #BreakingNews #Cancer $heb
1 Oct 14 08:01:15
$ARIA off bottom scalp only to volatile to hold overnight imho
Mark Romero
1 Oct 14 07:46:22
$ARIA Let the $IWM (Russel) settle and this will setup as a good swing. I'm still thinking a little lower still.
1 Oct 14 07:44:11
$ARIA $BBG $CLF $MHR $PEIX $TLM $UTHR $VIMC $WPX autocharts @ http://t.co/hj7PGeTQk3
Darth Brooklyn
1 Oct 14 07:35:35
September Swing Results are out - 16 trades, Avg Return 10.74% Nice!! http://t.co/EJ0yxsXDTj $TKMR $ARIA $ISNS $ARNA $CRDS
1 Oct 14 07:33:36
BLOCK TRADE: $ARIA 250,000 shares @ $5.34 [10:33:36]
1 Oct 14 07:12:09
$ARIA $CNET $CRK $EXXI $GTAT $HK $HL $SD autocharts @ http://t.co/hj7PGeTQk3
Darth Brooklyn
1 Oct 14 07:08:51
$ARIA Continues to slide. See my posts from 9/22 $ 9/25 . http://t.co/zOJKcfgUi2 $MNKD $TKMR $HEB
Victor Roberts, MD
1 Oct 14 06:19:19
$ARIA I always hear both sides! Here is AF/The Street rebuttal. I wish truth comes out fast & SEC probes! http://t.co/omaCxmhwqD
1 Oct 14 02:08:52
New, SECRET penny stock alert coming today! Check it out: http://t.co/A2y8IBJKSf $FASC $ARIA $TUCN
30 Sep 14 21:50:23
Expecting $ARIA to bounce back to $5.70-6.00 by EOW? Here's how to trade it: https://t.co/Dt32jWE14a
Small Cap Strategist
30 Sep 14 18:00:07
Most searched small-cap stocks, Tues Sept 30th - $JRJC $MOVE $SRPT $TGA $ARIA $TIPT $TVPT $AKS - More: http://t.co/1znvSOIJVT - #smallcap
30 Sep 14 17:51:06
ARIAD Pharmaceuticals Inc. (ARIA) Drops 6.57% on September 30 $ARIA http://t.co/h2u7Fcglw1
30 Sep 14 15:50:38
FPFI closed up 250% today! Huge Update and new pick coming: http://t.co/wSPWepHL5n $FASC $ARIA $TUCN
Dan Forman
30 Sep 14 15:06:11
RT @grdollasign: @harveyberger stellar BIC '113 data and no movement in $ARIA sp. This is an investor no confidence vote. Create sh value…
Darth Brooklyn
30 Sep 14 14:41:04
Another great month in the books. Join us!! http://t.co/1qmFPx62Zs $ANR $AKS $SPEX $CNET $WLT $ARIA #SWINGTRADING
Don Seiffert
30 Sep 14 14:14:50
@adamfeuerstein I'll also send the rebuttal to the two $ARIA investors who sent me Pearlstein's column as evidence I shouldn't cite you.
Smarter Analyst
30 Sep 14 10:26:16
$ARIA H.C. Wainwright Reiterates Buy On Ariad Following Clinical Data On AP26113 http://t.co/g9G74KQOar
Top Stocks
30 Sep 14 09:50:52
Cancer treatment progress reported at ESMO: http://t.co/VMjxneumfA $MRK $AZN $CLVS $BMY $OMED $PBYI $ARIA $EXEL $PFE http://t.co/5Q6OVaGP6o
30 Sep 14 09:50:52
Cancer treatment progress reported at ESMO: http://t.co/mrsjUdzz0T $MRK $AZN $CLVS $BMY $OMED $PBYI $ARIA $EXEL $PFE http://t.co/9tcnJKdrkr
30 Sep 14 09:38:21
$ARIA -set to rally on lung cancer news! Squeeze!!!! $pfe $jnj $dndn $ctic $kerx $GSK #Ebola $aapl $mrk #cnbc #news #BreakingNews #Cancer
30 Sep 14 08:53:35
MidCap #Stocks Performance $DWA $TIBX $IRM $INFA $LGF $SHLD $LPI $NI $CSC $NMBL $ARIA $EPE $INCY $COG more@ http://t.co/tf79gD96D3
30 Sep 14 08:36:34
$ARIA high open interest range is 5.50 to 6.00 for option expiration 10/03/2014. http://t.co/Tkl2uM4R2H
30 Sep 14 08:25:58
I think I got into $ARIA a couple days too soon. gonna stick with it
30 Sep 14 07:55:03
http://t.co/UUQeeS6eNk zturk: Got $ARIA 5.61: zturk http://t.co/MLpXiPTBH2 http://t.co/UUQeeS6eNk
OTPicks- OnTimePicks
30 Sep 14 07:55:01
http://t.co/q3RLPoRVry zturk: Got $ARIA 5.61: zturk http://t.co/OriwQfjvDn http://t.co/q3RLPoRVry
30 Sep 14 07:54:55
http://t.co/y0P0rvA8JD zturk: Got $ARIA 5.61: zturk http://t.co/Qs04KbdQZp http://t.co/y0P0rvA8JD
O T P i c k s . com
30 Sep 14 07:54:51
http://t.co/oHSUax81PW zturk: Got $ARIA 5.61: zturk http://t.co/HMFXuJvGU5 http://t.co/oHSUax81PW
Trader News Daily
30 Sep 14 07:43:08
http://t.co/PeRPkYu8Uk premium membership ranked #1 for gains. 483% last week. Related: $ACHN $SFUN $ALKM $TRTC $GLUU $ARIA $HBAN $HL
30 Sep 14 07:41:44
$VOIS gained 218.52% in less than 3 weeks, after our Penny Stock Alerts! Major Update: http://t.co/HglCNdSVSO $FASC $ARIA $TUCN
Baffoe K8B Awotwi
30 Sep 14 07:20:21
$ARIA - ARIAD présente de nouveaux résultats de son étude clinique sur l'AP26113 chez des patients atteints http://t.co/YWGSiijHSv
30 Sep 14 07:20:20
$ARIA - ARIAD présente de nouveaux résultats de son étude clinique sur l'AP26113 chez des patients atteints http://t.co/t2i6eHtpSV
30 Sep 14 07:20:16
$ARIA - ARIAD présente de nouveaux résultats de son étude clinique sur l'AP26113 chez des patients atteints http://t.co/HfkOefkXEM
Stocks News&Markets
30 Sep 14 07:20:14
$ARIA - ARIAD présente de nouveaux résultats de son étude clinique sur l'AP26113 chez des patients atteints http://t.co/mRFZslvKnc
30 Sep 14 07:20:11
$ARIA - ARIAD présente de nouveaux résultats de son étude clinique sur l'AP26113 chez des patients atteints http://t.co/1jiU83JM6R
Gianfranco Caputo
30 Sep 14 07:06:36
$ARIA https://t.co/OHjlKZRDWp
30 Sep 14 06:09:04
ClayTrader: * * $ARIA Video Chart 9-29-14 * * http://t.co/eyfxBBTtmG
Peter Bardens
30 Sep 14 05:32:01
$ARIA Pre-Earnings Bulls Charge Ariad Pharmaceuticals, Inc. (ARIA) http://t.co/jYO9OnuscG
30 Sep 14 05:20:19
http://t.co/hjgLwIcNgz idig: $ARIA ALERT $$: idig http://t.co/tWi9KTzyWH http://t.co/hjgLwIcNgz
30 Sep 14 04:39:33
http://t.co/Vv1sYDyeQn idig: ALERTS, HOT STOCKS & CHARTS: $ARIA ALERT $$ http://t.co/DKKBLGXutb
29 Sep 14 23:40:50
$VOIS gained 218.52% in less than 3 weeks, after our Penny Stock Alerts! Major Update: http://t.co/HglCNdSVSO $FASC $ARIA $TUCN
Ish Capital ™
29 Sep 14 20:38:25
$ARIA really hate seeing a good company get flipped like this.
Mark Romero
29 Sep 14 19:43:08
$ARIA From Tom Silver on Twitter. @TomSilver39 http://t.co/ib9gSLa9Ub
29 Sep 14 19:34:25
ClayTrader: * * $ARIA Video Chart 9-29-14 * * http://t.co/rTnfOAPcPx
29 Sep 14 17:33:58
$ARIA ALERT: New ARIAD Pharmaceuticals, Inc. SEC Filing From our Stock News Alerts App
29 Sep 14 17:27:26
RT @TomSilver39: CS" $ARIA AP26113 Efficacy Robust - Safety Improving1)dose-dependent acute pulmonary toxicity has largely been mitigated (…
Fred Twick
29 Sep 14 17:23:58
"@LooseCannon1: $ARIA This Stock LMAO drives me crazy I should of invested in the Cameras on a Popsicle stick company I be rich already"
By  +Follow January 27, 2014 8:25AM



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