MannKind

A stock in the biotechnology and drugs complex that insiders are snapping up is MannKind (MNKD), which is focused on the discovery, development and commercialization of therapeutic products for diseases such as diabetes and cancer. Insiders are buying this stock into some modest strength, since shares are up about 5% so far in 2012.

MannKind has a market cap of $414.5 million and an enterprise value of $852 million. Its estimated growth rate for this year is 26.5%, and for next year it’s pegged at 52.6%. This is not a cash-rich company, since the total cash position on its balance sheet is $56.71 million, and its total debt is $494.40 million.

The CEO and chairman of the board just bought 31,250,000 shares, or about $77.18 million worth of stock, at $2.47 per share.

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From a technical perspective, MNKD is currently trading above both its 50-day and 200-day moving averages, which is bullish. This stock bottomed back in June after buying interest came in at around $1.65 to $1.70 a share. Following that bottom, shares of MNKD rallied hard to its recent high of $2.91 a share. During that rally, shares of MNKD were making higher lows and higher highs, which is bullish technical price action.

If you’re in the bull camp on MNKD, then I would look for long-biased trades as long as this stock is trending above its 200-day moving average of $2.55 with strong upside volume flows. Look for volume that’s tracking in close to or above its three-month average action of 2 million shares. If MNKD can manage to hold that trend, then this stock has a great chance of trading back towards its next significant overhead resistance level at $3.48 a share.

On the flipside, I would avoid MNKD if it moves back below its 200-day at $2.55 with high-volume. If this stock were to take out its 200-day with volume, then we could get a re-test of its 50-day moving average of $2.01 a share.

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