Array Biopharma Inc. (ARRY) shares rose more than 5% on Thursday after Roche Holdings AG's (RHHBY) COTELLIC+TECENTRIQ clinical trial failed to beat Bayer AG's (BAYRY) STIVARGA in treatment-resistant advanced colorectal cancer in a Phase III clinical trial. The failure is important because Array Biopharma has an ongoing late-stage trial combining encorafenib, binimetinib and Erbitux in patients with BRAF-positive colorectal cancer.

In January, Array Biopharma announced that its Phase III clinical trial had an overall response rate of 48% with an estimated median progression-free survival rate of eight months. The results, presented at the ASCO GU Symposium in San Francisco, also included three complete responders. Enrollment is ongoing, with an estimated clinical trial completion date in July 2019, when the full results will be analyzed and reported. (See also: Why Array Biopharma May Become a Winner.)

Technical chart showing the performance of Array Biopharma Inc. (ARRY)

From a technical standpoint, the stock fell sharply from a high of around $18.50 to a low of around $12.50 over the past two months before rebounding from the 200-day moving average earlier this week. The relative strength index  (RSI) appears neutral with a reading of 49.69, but the moving average convergence divergence  (MACD) could see a near-term bullish crossover, suggesting that the stock could have some room to run.

[Check out Chapter 4 of the Technical Analysis course on the Investopedia Academy to learn more about supplemental technical indicators like the RSI and the MACD]

Traders should watch for a sustained breakout from the pivot point at $14.44 to R1 resistance and the 50-day moving average at around $15.65 on the upside. If the stock breaks below trendline support at $14.00, the stock could move lower to retest its 200-day moving average at $12.82 or S1 support at $12.53 on the downside. The good news is that the high-volume up day could suggest further upside over the coming sessions. (For more, see: The Industry Handbook: Biotechnology.)

Chart courtesy of StockCharts.com. The author holds no position in the stock(s) mentioned except through passively managed index funds.

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