Harry Boxer is watching four stocks, RXDX, MRTX, SPPI and TDOC. He’s the founder of TheTechTrader.com, a live trading room featuring his stock picks, technical market analysis, and live chart presentations.
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Four biotech and health-related stocks top our list of momentum charts to watch.
Ignyta, Inc. (RXDX) popped 7%, or 95 cents, Tuesday, closing at $14.35 on heavy volume of 1.4 million shares traded. The move came on news of both positive clinical trial results and an announcement from the European Medicines Agency that it has given special designation and support to the company's tumor drug. The stock has been on a strong march up since it broke above its bull wedge consolidation pattern on October 2, when the biotech company had announced positive drug data. There is significant lateral resistance around $15, notable because price could not persist above $15 the last time it was this high in December 2015. Beyond that, the rising channel top points to the potential of $22-$24.
Mirati Therapeutics, Inc. (MRTX) rose 55 cents to close at $14.25 Tuesday on no news. The stock has gained 400% since May 31. Price has been consolidating in a beautiful bull flag pattern for the past 9 days. If there is a return to momentum in the biotech sector, this oncology drug stock may run to $15.50 again in the short term and $20 soon after that.
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Spectrum Pharmaceuticals, Inc. (SPPI) broke out above a bull flag consolidation pattern on Tuesday, gaining 52 cents and closing at $14.46 on 1.7 million shares traded. The move came on news that positive clinical study data will be presented before market open on Wednesday by doctors from the University of Texas MD Anderson Cancer Center. Next target: $18. Short interest of 11 times its average volume could fuel the move as shorts cover on a rally.
Teladoc, Inc. (TDOC) moved up $1.30 and closed at $34 on 1 million shares traded and no news. There have been two encouraging tests of the present price channel. The stock came down hard into $30.80 on September 21, but stayed above its long-term trendline up. A retest of the bottom of the channel occurred on Monday and price still held its ground. Simultaneously, price has been coiling in a bull wedge consolidation pattern since the end of June. If the telehealth stock closes above $35, price could run to $37.50. Short interest of 17 times its average volume could fuel the move as shorts cover on a rally.
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