Synta Pharmaceuticals Corp. (SNTA): Under $6 Pharma Stock Gearing Up for a Potential 67% Breakout

Good news can include things like earnings beating estimates, a new product, mergers, acquisitions, FDA approval and a host of other bullish happenings. Every sector has its own bullish triggers. It takes a bit of experience to determine what types of news events have the most effect on the stock price.

Presently, I use a program that scans the market for stocks fulfilling these three major points and other lesser price drivers. It can also be done by hand one step at a time.

My most recent scan, applying the crucial stock picking criteria, revealed a very interesting stock in the biotech sector. This stock fits all of the guidelines to make a solid short-term investment.

Synta Pharmaceuticals Corp. (NASDAQ:SNTA) specializes in discovering and commercializing small molecule drugs that are targeted to extend and enhance the lives of individuals with cancer and chronic inflammatory disease.

Boasting a market cap of nearly $396 million, over $90 million in cash, and a small debt load of about $24 million, Synta appears fundamentally solid.

The company controls a unique chemical compound library gleaned from more than 20 years of industrial and academic sources. Built on top of this access, Synta has 800 patents and is in the application stage on the global scale for its high-tech and drug creations.

Its most exciting drug candidate presently is Ganetespib. This drug is for breast, colorectal, lung and hemolytic cancer patients. The drug is designed to inhibit a molecular chaperone that is essential for the function of the most fundamental drivers of cancer cell growth. Putting aside the technical jargon, this drug is showing promise in hundreds of patients and over 20 clinical trials.

Let’s drill down into each of the three factors that make Synta Pharmaceuticals Corp. (NASDAQ:SNTA) a strong candidate for continued bullish growth.

Moving Averages

Synta Pharmaceuticals Corp. (NASDAQ:SNTA) has bounced off of the lows around $4 and broke out above its 50-day simple moving average at $6 on Wednesday. While it has pulled back some since then, another breakout makes the stock attractive to trend following funds and investors who purchase breakouts above the major moving averages. It tells me that further upside is probable.

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This article was originally written by Dave Goodboy and posted on StreetAuthority.