Agios Pharmaceuticals - AGIO - close: 31.33 change: +2.88

Stop Loss: 27.45
Target(s): 39.00
Current Gain/Loss: unopened

Entry on February -- at $--.--
Listed on February 10, 2014
Time Frame: 6 to 8 weeks
Average Daily Volume = 380 thousand
New Positions: Yes, see below

Company Description

Why We Like It:
AGIO is in the healthcare sector. They are a biotech firm focused on developing the field of cellular metabolism to treat cancer and inborn errors of metabolism (IEMs). This stock came to market with an IPO in July last year. Since then it's been a rocky ride. AGIO surged from $22 to $44 in about two weeks early January this year and the collapsed. The sell-off may have been exaggerated thanks to a stock lock up expiring on January 20th. Fortunately AGIO has found support in the $25-29 zone the last couple of weeks.

The relative strength in AGIO over the last few days is suggesting the rally is back. The breakout past resistance at $29 and $30 is bullish. Further strength could spark more short covering. The most recent data listed short interest at 19% of the very small 11.0 million share float.

Due to AGIO's volatility I am suggesting small positions to limit risk. Regular readers already know that we consider biotech stocks more aggressive and higher-risk. The right headline about drug development, clinical trial result, or step in the FDA approval process can send a biotech stock soaring. The wrong headline can spark a crash.

We are suggesting small bullish positions now at the opening bell tomorrow. We'll start with a stop loss at $27.45. Our multi-week target is $39.00.

*Small positions to limit risk!*

Suggested Position: buy AGIO stock @ (the opening bell)

Annotated chart: