Ready to Roll With ONYX

I still feel comfortable with biotechs. We've already seen a great breakout by Sarepta Therapeutics (SRPT), but this sector is full of big movers in both directions. Another one that looks ready to roll higher is ONYX Pharmaceuticals (ONXX). I know that Bob Lang is already in this name and has benefited from the recent run higher, even if it was a bit bumpy. For me, ONXX on a close above $90 sets up a trigger for a move to $97. I actually suspect it would see $100, but not because of a measured target or anything, but simply from the psychological push to see the round number many traders love.

ONYX (ONXX) Source: StockCharts.com View Chart » View in New Window »

Stochastics support the price and I expect the relative strength index to jump in here as well. The options are playable even with the wider spreads and low open interest. If one is willing to go a bit into the money with something like the April or May $85 calls, the time premium isn't unreasonable. When I have the choice, I prefer a call option to straight-up shares when trading a biotech. There is just so much overnight risk that comes with these names; however, I will get long this name if it remains over $90 with just a few minutes left in today's trading session....133 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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