Volume Hunter: Biotech (MELA, OREX, VVUS, ARNA, CYPB, MNKD, DSCO, NVAX)
There has been plenty of FDA-driven action in the biotech sector of late, providing ample opportunity for active traders to capitalize on momentum trades. In November, a seemingly negative FDA staff review was followed by a surprise panel vote in favor of MELA Sciences’s (MELA) melanoma detection device. The stock whipsawed between $7 and $2.50 on recent news, and has most recently given back the bulk of its post-panel vote rebound. Elsewhere, Orexigen Therapeutics (OREX) helped Vivus (VVUS) and Arena Pharmaceuticals (ARNA) higher after the FDA’s advisory panel voted in support of the company’s Contrave prescription diet pill.
With a multitude of volatile biotech stocks to monitor, finding the most tradable securities on a given day can sometimes be overwhelming, but proprietary metrics in tickerspy’s Biotechnology Stocks Index can help hone in on the most actively traded biotechs relative to their average daily volume.
Sorting the Biotechnology Stocks Index by intra-day price change shows that Cypress Biosciences (CYPB), MannKind (MNKD), Discovery Laboratories (DSCO), and Novavax (NVAX) are all among top performers, gaining upwards of 4%. To determine whether notable news or tradable speculation is driving the respective rallies, traders can look to the “% of Daily” relative volume metric, which indicates that, as of this writing, each of the four biotechs had traded more than 200% of their average mid-morning volume — the metric updates based on time during the session to provide an accurate representation of volume spikes intraday.
In today’s case, Cypress is running on a $6.50 per share buyout by Ramius Capital and Royalty Pharmaceuticals, MannKind is extending recent momentum, and Novavax and Discovery Labs are moving higher on sparse company-specific news.
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