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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
Victor Roberts, MD
24 Oct 14 15:08:54
$ARIA Short interest @ 50.38 Mill, + 1.2%, but Days to cover down to 5.5! Avg daily trading vol increasing! - nasdaq! http://t.co/8iyJDVK1to
Victor Roberts, MD
24 Oct 14 15:06:03
$ARIA Short interest @ 50.38 Mill, + 1.2%, but Days to cover down to 5.5! Avg daily trading vol increasing @ 9 Mill! http://t.co/GLxzQInwAV
Stockaholics
24 Oct 14 14:38:07
Our Penny Stock Alerts Gained 371% In 2 weeks! Sign Up For Free Text Alerts For Our New Pick: http://t.co/Wsu24zYrur $FASC $ARIA $TUCN
Sarcasm Bot
24 Oct 14 13:14:31
$ARIA No one willing to add to their position Poison pill is not GOOD Mr. CEO
$Stocknewsalerts
24 Oct 14 13:11:13
$ARIA ALERT: New ARIAD Pharmaceuticals, Inc. SEC Filing From our Stock News Alerts App
Baffoe K8B Awotwi
24 Oct 14 13:10:30
$ARIA - Current Report Filing (8-k) http://t.co/VIXk1yDsQs
StockNews
24 Oct 14 13:10:29
$ARIA - Current Report Filing (8-k) http://t.co/TWy6O1Wo99
Pzaa...Guy
24 Oct 14 13:10:26
$ARIA - Current Report Filing (8-k) http://t.co/MqZtCXMMhc
4-traders.com
24 Oct 14 13:10:22
ARIAD PHARMACEUTICALS : Other Events (form 8-K) http://t.co/0CtQWMem2R $ARIA
Stocks News&Markets
24 Oct 14 13:10:20
$ARIA - Current Report Filing (8-k) http://t.co/8g80kHQnTw
NASDAQ
24 Oct 14 13:10:15
$ARIA - Current Report Filing (8-k) http://t.co/mQC8apw5fY
Instrumental Data
24 Oct 14 13:08:09
ARIAD PHARMACEUTICALS INC $ARIA 8-K now available
A
24 Oct 14 13:07:39
RT @FonsieTrader: $ARIA Nice reversal! Heading higher
Dan Forman
24 Oct 14 12:56:29
RT @MaisaCorp: $ARIA European regulators recommended continued use of $ARIA cancer drug, Iclusig, in its already approved indications to tr…
MAISA
24 Oct 14 12:47:21
$ARIA European regulators recommended continued use of $ARIA cancer drug, Iclusig, in its already approved indications to treat leukaemia.
Dan Forman
24 Oct 14 12:26:58
$aria more and more great news but no short squeeze yet. Someone holding price down for buyout?
A P
24 Oct 14 12:13:33
Update: $ARIA trading +1.93% #trading #BiotechTraderHandbook--> http://t.co/JDdc1OTfZF
Large Void Bot
24 Oct 14 12:00:21
Popular: $INVN, $F, $RGLS, $ARIA, $CCIH, $ATVI, $REXX, $M, $WDAY, $XON, $BREW, $NTAP
Kenneth Meyerson
24 Oct 14 11:35:20
RT @FonsieTrader: $ARIA Nice reversal! Heading higher
Kenneth Meyerson
24 Oct 14 11:35:12
RT @ffrommgen: $ARIA creating a he'll of a daily candle. Finish strong please
FonsieTrader
24 Oct 14 11:31:27
$ARIA Nice reversal! Heading higher
Rick Frommgen
24 Oct 14 11:27:57
$ARIA creating a he'll of a daily candle. Finish strong please
Kenneth Meyerson
24 Oct 14 11:26:19
$ARIA (now): "It's not easy being green" $ARIA (3 hrs ago): "no kidding!"
Victor Roberts, MD
24 Oct 14 11:26:06
Commented on StockTwits: $ARIA new HOD, 90 more minutes to go. Say bye to 5s and say hello to 6s ! LOL http://t.co/5VtckrDBbI
Helmer
24 Oct 14 11:25:06
$ARIA finally.. new hod
Small Cap Trader
24 Oct 14 11:11:44
$ARIA daily bullish
Small Cap Trader
24 Oct 14 11:10:25
$ARIA inching up 5.80
Victor Roberts, MD
24 Oct 14 10:37:04
Commented on StockTwits: nice to see u back when $ARIA was down and like clockwork u disappear when it's up. Enjo... http://t.co/loBxouplll
Kenneth Meyerson
24 Oct 14 10:31:36
RT @BlockTradeAlert: BLOCK TRADE: $ARIA 500,000 shares @ $5.72 [13:11:49] MT a #prequake for the next leg-up?
Victor Roberts, MD
24 Oct 14 10:22:46
Commented on StockTwits: Added 500 more $ARIA shares at 5.70. Nice reversal, looking good so far! Will take profi... http://t.co/qjDgu6QTlu
Victor Roberts, MD
24 Oct 14 10:19:51
Commented on StockTwits: I think its short covering which pushed $ARIA fron 5.55 to 5.72. Someone unloaded at thi... http://t.co/urGXhlXInJ
BlockTradeAlert
24 Oct 14 10:11:50
BLOCK TRADE: $ARIA 500,000 shares @ $5.72 [13:11:49]
Stockaholics
24 Oct 14 10:09:25
Our Penny Stock Alerts Gained 371% In 2 weeks! Sign Up For Free Text Alerts For Our New Pick: http://t.co/dLDRavoCi4 $FASC $ARIA $TUCN
Victor Roberts, MD
24 Oct 14 09:47:04
$ARIA May be this week ICLUSIG sales numbers caused the drop! looks some kind of adjustment of projections going on! http://t.co/tEfbXhqPLq
Stock Relay
24 Oct 14 09:37:11
$PLUG % Change Click Here: http://t.co/TsxhBArYRi Also See: $SKM $PACT $KF $ARIA ~
Kenneth Meyerson
24 Oct 14 09:25:08
@Drragu good call ;~) Now, we need analyst upgrade(s) to add that certain #OOMPH to the momentum. $ARIA
dougheuring
24 Oct 14 09:24:40
$ARIA TRx/NRx are 81/31,-20/-24% wk/wk, week 39 since Jan re-launch IMS stopped projections that overstated 8-15/14-9/5/14 Iclusig 28%;
Victor Roberts, MD
24 Oct 14 09:18:23
Commented on StockTwits: My small trading strategy is getting paid well so far in $ARIA swing today http://t.co/GEdSxYqINX
Rick Frommgen
24 Oct 14 08:42:29
$ARIA how much reimbursement are we waiting on in emea? That's not just rev but cash too right? Like they haven't been paid yet or rec rev
Robert
24 Oct 14 08:29:27
$ARIA based on CHMP News the stock went cliff diving again
Victor Roberts, MD
24 Oct 14 08:29:07
Commented on StockTwits: Market maker?looks like he or some one yet to recover losses from last year big $ARIA drop http://t.co/EnFiwrMOKi
Victor Roberts, MD
24 Oct 14 08:23:46
Commented on StockTwits: $ARIA speculative traders cashing in profits if any, LOL! buy the rumor and sell the new... http://t.co/ndyaTkVl9h
Victor Roberts, MD
24 Oct 14 08:14:11
Commented on StockTwits: maintain a core position & trade around it. added 500 more $ARIA shares @ 5.58. That's i... http://t.co/TkGiuXcijm
Mark Romero
24 Oct 14 07:59:18
$ARIA If Iclusig sales are much better in this Quarterly Report along with guidance the Europe decision will mean much more. #SalesMatter
Baffoe K8B Awotwi
24 Oct 14 07:57:10
$ARIA - ARIAD annuncia l'adozione di un'opinione finale per Iclusig da parte del Comitato europeo per i http://t.co/kRiX9PQUEX
StockNews
24 Oct 14 07:57:09
$ARIA - ARIAD annuncia l'adozione di un'opinione finale per Iclusig da parte del Comitato europeo per i http://t.co/2JNEYmiB10
Pzaa...Guy
24 Oct 14 07:57:08
$ARIA - ARIAD annuncia l'adozione di un'opinione finale per Iclusig da parte del Comitato europeo per i http://t.co/ugcne8FU0c
Stocks News&Markets
24 Oct 14 07:57:05
$ARIA - ARIAD annuncia l'adozione di un'opinione finale per Iclusig da parte del Comitato europeo per i http://t.co/9mCQAoKEye
NASDAQ
24 Oct 14 07:57:02
$ARIA - ARIAD annuncia l'adozione di un'opinione finale per Iclusig da parte del Comitato europeo per i http://t.co/eqZ9RXLdKU
The Skeptic
24 Oct 14 07:51:52
RT @AndyBiotech: $ARIA EMA recommends further measures to minimise risk of blood vessel blockage with Iclusig http://t.co/pX26VKf1yT http…
				
				
By  +Follow January 27, 2014 8:25AM
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