The recent volatility has been incredibly welcomed by short term traders and investors.  Finally the stock market and many individual names have started to move enough to create profits in a very short time frame.

This is particularly true for penny stock traders trying to locate the best penny stocks to trade.  Wealthpire’s premium penny stock advisory Penny Stock Guru took advantage of the overall volatility and a special situation in a particular penny stock to earn profits for active readers.

Orexigen Therapeutics, Inc. (OREX) is a biopharmaceutical company that focuses on the development of pharmaceutical product candidates for the treatment of obesity. Biotechnology stocks have been some of the hardest hit stocks during the recent market meltdown.

On Wednesday Oct. 15 the company announced it earned a $70 million milestone payment from partner Takeda Pharmaceuticals related to the shipment of Contrave, a weight loss drug, to pharmacy wholesalers in preparation for commercial launch. In September the company received approval of Contrave by the United States Food and Drug Administration.

Contrave combines two drugs already on the market. The first is bupropion (Wellbutrin), an antidepressant, and naltrexone, an anti-addiction drug. The drug is a daily pill that is approved for use in adults with a body mass index or BMI of 30, which is considered obese or a BMI of 27 with conditions that raise heart and stroke risks, such as high blood pressure, cholesterol, or type 2 diabetes.

The company is expected to release its earnings results between November 10 and November 14, 2014. The average analyst estimate according to Yahoo Finance is for the company to deliver earnings of $0.00 per share on revenue of 23.81 million.

The stock has traded in a 52-week range peaking at $7.82 and recently hitting its 52-week low on Monday Oct. 13 at $3.11. Prices gapped higher the following Wednesday and are poised to test target resistance near the 50-day moving average at $4.99.

Additionally, momentum on the stock has turned positive. The MACD (moving average convergence divergence) index generated a buy signal. This occurs when the spread (the 12-day moving average minus the 26-day moving average) crosses above the 9-day moving average of the spread. Until, Wednesday the stock price was oversold. The relative strength index (RSI ) is now printing at 42, but prior to Wednesday was printing a reading of 28, which was below the oversold trigger level of 30.

After closing last week near $4.08, OREX, which moved into our buy zone at $3.85 – $4.05, soared allowing us to take profit at $4.95.