TM Editors' note: This article discusses a penny stock and/or microcap. Such stocks are easily manipulated; do your own careful due diligence.

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A security pattern traces the distinct movements of security prices that, once recognized, help traders to make informed trading decisions. These patterns are identified by their vital geometrical elements, which are formed by changing security prices. Let's look at some biotech stock opportunities by analyzing these patterns.

Buy Signal for Inozyme Pharma, Inc. (INZY) (Triangle Ascending)

The triangle ascending pattern forms when the price of a security tests a resistance level and creates a horizontal top line (1, 3, 5), with an upward­-sloping bottom line (2, 4), which is formed by a rising support level. The breakout can either be up or down, and this will determine whether the target price is higher or lower.

This pattern is commonly associated with directionless markets, since the contraction (narrowing) of the market range signals that neither bulls nor bears are in control. When the price of a security consolidates around a certain level, it may indicate growing investor confidence for a significant uptrend.

Trade idea:

• Buy near the breakout (entry) price – $4.23.
• Sell at the target (exit) price – $4.76.

Trend trading is a strategy based on the technical analysis of changing market prices. The trend trader enters into a long position when a stock is trending upward, and uses the short position when a stock is trending downward.

Buy Signals for SIGA Technologies (SIGA), Alkermes plc (ALKS), & Vertex Pharmaceuticals (VRTX)

Trade idea:

• Buy at the opening of the stock market on Monday if the opening price has gone up by no more than 0.5% of Friday's closing price.
• Sell after the price has risen by 2% from Friday's closing price, or at the end of the trading week if the target is not reached.

Buy Signal for Cytokinetics, Inc. (CYTK)

Trade idea:

• Buy CYTK at the current market price if seen as appealing.
• Sell CYTK after receiving the "sell" recommendation from trusted analyses.