NEW BULLISH Plays
Arrowhead Research - ARWR - close: 11.73 change: +0.96
Stop Loss: 10.75
Target(s): to be determined
Current Gain/Loss: unopened
Entry on May -- at $--.--
Listed on May 19, 2014
Time Frame: 6 to 8 weeks
Average Daily Volume = 1.3 million
New Positions: Yes, see below
Why We Like It:
ARWR is in the healthcare sector. The company is in the biotech industry.
Biotech stocks peaked in early March as investors started selling momentum and high-growth names. ARWR was definitely a target for profit taking after a rally from $2.00 a share back in July 2013 to over $25 in March 2014.
Biotech analysts believe ARWR has a lot of potential. The company is working on a treatment for hepatitis B and should have new data available in the third quarter this year. If successful the hepatitis B treatment could be a multi-billion drug as there are over 300 million patients around the world.
ARWR currently has a market cap of about $600 million but a Deutsche bank analysts believes ARWR's market cap could surge to $4-to-$5 billion if its hepatitis B treatment is approved. ARWR is also developing new treatments on its RNAi technology.
Make no mistake, this is an aggressive trade. ARWR is an early stage biotech firm with no revenues. Any investment is a belief they will bring successful clinical data and eventually get FDA approval for its drugs in development.
Technically after a drop from $25 to $10 most of the air has been let out of the prior bubble. As investors return to risk on trades we think ARWR could outperform.
Tonight we're suggesting a trigger to open bullish positions at $12.05. We'll start this trade with a stop loss at $10.75.
Trigger @ $12.05
Suggested Position: buy ARWR stock @ $12.05
- (or for more adventurous traders, try this option) -
buy the Sep $12.50 call (ARWR140920C12.5) current ask $3.20