Were you listening back on December 20th when yours truly suggested Arca Biopharma Inc. (NASDAQ:ABIO) was a budding bullish play? I hope so. If you stepped in then, you'd now be up 9.3%. No, it's not a lot. Then again, it's been less than two weeks. Regardless of whether or not you got into ABIO then, though, as of today, Arca Biopharma have cleared a hurdle that suggests the best is yet to come.
ABIO is, as the company moniker would imply, a biotech stock. Its claim to fame is stem cell therapies for heart diseases. Specifically, Arca Biopharma Inc. is developing Gencaro, which is a beta blocker aimed at preventing atrial fibrillation. The drug's ready for Phase 2b/3 trials, and that testing should be underway by the end of Q1 of 2014.
That's not the reason a newcomer might want to wade into ABIO today, however. What's making this stock so compelling right here and right now is the way it's moved past some key resistance levels on Tuesday, and put some distance between itself and those lines today. As such, Arca Biopharma has little - maybe nothing - holding them back now. The weekly chart below illustrates this idea.
The big line in the sand that's been hurdled is the 200-day moving average line (green) at $1.63. It's probably the grandmother of all key moving average lines, and though technically analysis is generally applied to larger stocks, it's still a good sign that a smaller name like ABIO has been trending higher for more than a little while; we can't chalk this up to a little volatility. It's worth adding that Arca Biopharma shares have not only already logged a higher low, but are starting to accelerate.
When we zoom into a daily chart of ABIO, the picture gets even more bullish. Not only does the overall uptrend remain evident in this timeframe, we can also see how the shorter-term moving averages have acted as support lines more than a few times as the 200-day moving average line was being approached. It all contributes to the budding breakout effort.
While we're still apt to see more back-and-forth from Arca Biopharma Inc., the heavy lifting's been done - the big hurdles have been cleared. Shares could reach the $2.50-ish area before hitting a significant ceiling and slowing down. The tricky part is just figuring out how and where to jump in.
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