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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
Trevor
26 Jan 15 13:33:28
$ARIA Harvey keeps having to avg down. Just bc you're an insider doesn't mean you make good buys.
RF2009
26 Jan 15 13:29:16
RT @ACInvestorBlog: $ARIA Insider buying 2*12500 http://t.co/8JDWIkzbcO
Phil Martin
26 Jan 15 13:24:34
$ARIA http://t.co/T1eqEAgcwP
Media Sentiment
26 Jan 15 13:17:58
$ARIA received a new alert. Find out why at http://t.co/5lwmDm2SCs #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 480
$Stocknewsalerts
26 Jan 15 13:17:46
$ARIA ALERT: New ARIAD Pharmaceuticals, Inc. SEC Filing From our Stock News Alerts App
Antonio Costa
26 Jan 15 13:14:02
$ARIA Insider buying 2*12500 http://t.co/8JDWIkzbcO
Baffoe K8B Awotwi
26 Jan 15 13:13:27
$ARIA - Statement of Changes in Beneficial Ownership (4) http://t.co/55YFhYT3tA
Insider Filings
26 Jan 15 13:13:27
$ARIA: BERGER HARVEY J M D bought a net $154,240 in ARIAD PHARMACEUTICALS INC. http://t.co/IB5Ztf1Z2G
StockNews
26 Jan 15 13:13:26
$ARIA - Statement of Changes in Beneficial Ownership (4) http://t.co/MD6Bhdj1Qr
Stocks News&Markets
26 Jan 15 13:13:21
$ARIA - Statement of Changes in Beneficial Ownership (4) http://t.co/0D7blbq6fG
FonsieTrader
26 Jan 15 13:13:20
$ARIA Ariad Pharmaceuticals Chairman Berger Buys 25,000 Shares @$6.17/Share #stocks #trading
NASDAQ
26 Jan 15 13:13:17
$ARIA - Statement of Changes in Beneficial Ownership (4) http://t.co/Ah8c8mO45v
Insider Alerts
26 Jan 15 13:12:14
$ARIA: New Insider Transaction on ARIA by Chairman & CEO BERGER HARVEY J M D: http://t.co/2TJKGLdz46 http://t.co/lhknmNzw07
James P Worthy
26 Jan 15 13:02:32
$ARIA Stocks Underperform for the Week: NRG Energy Inc , ARIAD Pharmaceuticals Inc http://t.co/Jk8Tf01Wbo
Jack Trader
26 Jan 15 13:02:28
$ARIA ARIAD Pharmaceuticals: Is The Ship Turning Around? http://t.co/gDp1uhdNSW
Trader News Daily
26 Jan 15 12:49:19
Wow http://t.co/PeRPkZkWiw just posted last weeks results. +429%. Crazy. They offer a free trial too. $BSBR $ARIA $GALE $NBG $MHR
DCTrader
26 Jan 15 12:49:16
$ARIA 6.9 (6.35) , $CYTR 3.3 (2.77) , $CUR 3.52(3.25), $CPRX 3.5 (3.3) possible swing trade...
PennyStock Zone
26 Jan 15 12:03:47
'Choose yourself!' book review http://t.co/eI9c5QLAlt $AMOT $ARIA $BDR $CAMT $CDZI $DGLY $FSI $INTT $MNDO $NVEE
Ticker Report
26 Jan 15 10:55:49
Brokerages Set Ariad Pharmaceuticals Price Target at $7.40 $ARIA http://t.co/dSHzusompq
Livevol Community
26 Jan 15 09:00:06
IV30(TM) GAINER $AVP +24.54% $KND +23.57% $OLED +23.01% $KATE +21.43% $ARIA +18.01% $WDC +14.6% $ETP +12.82% http://t.co/gwzPxhFaBv
OTPicks.com
26 Jan 15 08:50:52
http://t.co/WZ6FGvJQNb bobirw: Add 2000 $ARIA at 6.30: bobirw http://t.co/AsVJlRZs9Y http://t.co/WZ6FGvJQNb
OTPicks.com
26 Jan 15 08:50:52
http://t.co/WZ6FGvJQNb bobirw: Bot 2000 $ARIA at 6.30 HOD: bobirw http://t.co/iWbuPhI6ZQ http://t.co/WZ6FGvJQNb
OTPicks- OnTimePicks
26 Jan 15 08:50:50
http://t.co/f15mUdD9Cd bobirw: Add 2000 $ARIA at 6.30: bobirw http://t.co/Cq5kcm3dop http://t.co/f15mUdD9Cd
OTPicks- OnTimePicks
26 Jan 15 08:50:50
http://t.co/f15mUdD9Cd bobirw: Bot 2000 $ARIA at 6.30 HOD: bobirw http://t.co/AOwxJbjQlh http://t.co/f15mUdD9Cd
OTPicks.com
26 Jan 15 08:50:47
http://t.co/y0P0rwqW7P bobirw: Add 2000 $ARIA at 6.30: bobirw http://t.co/eotys6L8Pa http://t.co/y0P0rwqW7P
OTPicks.com
26 Jan 15 08:50:47
http://t.co/y0P0rwqW7P bobirw: Bot 2000 $ARIA at 6.30 HOD: bobirw http://t.co/EazyKqXoYA http://t.co/y0P0rwqW7P
ProTradersNews
26 Jan 15 08:21:09
$ARIA $MCP: Ever Green Stocks: Ariad Pharmaceuticals Inc. (NASDAQ:ARIA ...: http://t.co/QOZXF2O6lV
Mark Trader
26 Jan 15 08:17:25
http://t.co/vJ93JPRWBF has the most reliable picks in the market. The move fast and never fail. $WEN $SPF $NLY $GFI $SRC $ARIA
Trader News Daily
26 Jan 15 08:14:39
Wow http://t.co/PeRPkZkWiw just posted last weeks results. +429%. Crazy. They offer a free trial too. $BSBR $ARIA $GALE $NBG $MHR
NitemareOnWallStreet
26 Jan 15 07:40:52
$ARIA flat top on HOD, failing to breakout. here we come $ARRY
Stock Signaling
26 Jan 15 07:01:15
Top Stocks (By Trading Liquidity): $OCN $ARIA $AKS $P $SCOK $AEGR $CNAT $CVEO $ADHD $NE $YELP $WLL $GDP $INVN $SSRI http://t.co/S9oPUZ8PN3
Alexander Morris
26 Jan 15 06:57:32
$ARIA: At 1DyHIGH=6.23, hits:1, ch:+2.1%, 1phNewHi, 6:3Accel+, tf:0011111, medFlt:167M, HiPctSht[28%:7d], DyVol:366T:0.1x:0.1x
Mark Trader
26 Jan 15 06:34:15
I banked over 200% in gains during my 14-day trial with http://t.co/6cvEHBeuNR. Their 5 guru traders are amazing. $ARIA $MYEC $SWET
PennyStockSuperstar
26 Jan 15 06:34:02
Check out our alert track record here... http://t.co/BdiZMRYWH1. Sign up is free. See you soon! $PDLI $NBG $FTR $ARIA $CNET $COT
Stephen s
26 Jan 15 06:02:39
RT @BoilerWarrior: Why trade alone? Get real time trade alerts from 5 pro traders at http://t.co/iQWRYqnOQl $ARIA $MYEC $SWET
Wall Street
26 Jan 15 05:55:21
Why trade alone? Get real time trade alerts from 5 pro traders at http://t.co/iQWRYqnOQl $ARIA $MYEC $SWET
StockAviator.com
26 Jan 15 05:00:00
Join thousands of traders at http://t.co/30Wzoc9t1Q. 5 pro trading gurus alerted 500% gains last week. $GSAT $BBRY $ZNGA $RAD $ARIA
ProTradersNews
26 Jan 15 00:31:06
$NRG $ARIA: Stocks Underperform for the Week: NRG Energy Inc , ARIAD ...: http://t.co/QXcstEIIY4
Mark Trader
25 Jan 15 18:44:08
http://t.co/vJ93JPRWBF has the most reliable picks in the market. The move fast and never fail. $WEN $SPF $NLY $GFI $SRC $ARIA
Penny Stock Secret
25 Jan 15 17:46:50
This Guy Turned $100 into over $10,000 In Just 30 Days! http://t.co/vezCDY95do .. $INSY $SIGI $ARIA
DerrickJL
25 Jan 15 17:11:26
@planeteyes I don't short stocks with pending news, $ARIA good example
Trader News Daily
25 Jan 15 14:39:55
Wow http://t.co/PeRPkZkWiw just posted last weeks results. +429%. Crazy. They offer a free trial too. $BSBR $ARIA $GALE $NBG $MHR
Stock Rocket
25 Jan 15 13:56:39
Our Penny Stock Picks Gained 968% In 5 Weeks! Get Our Next Pick Early: http://t.co/wMEn6i1tkM $FASC $ARIA $TUCN
Yuppy
25 Jan 15 13:33:02
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25 Jan 15 13:08:02
Check out our alert track record here... http://t.co/BdiZMRYWH1. Sign up is free. See you soon! $PDLI $NBG $FTR $ARIA $CNET $COT
StockAviator.com
25 Jan 15 12:39:13
Join thousands of traders at http://t.co/30Wzoc9t1Q. 5 pro trading gurus alerted 500% gains last week. $GSAT $BBRY $ZNGA $RAD $ARIA
Stock Rocket
25 Jan 15 11:56:44
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Mark Trader
25 Jan 15 11:52:04
http://t.co/vJ93JPRWBF has the most reliable picks in the market. The move fast and never fail. $WEN $SPF $NLY $GFI $SRC $ARIA
Wall Street
25 Jan 15 10:59:42
http://t.co/iQWRYqnOQl....Top penny stocks, NYSE, and NASDAQ trades from the stock market today. +296% last week. $ARIA $MYEC $SWET
Stockaholics
25 Jan 15 10:26:00
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By  +Follow January 27, 2014 8:25AM
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