Sunday, August 28, 2011

$AEZS Technical Analysis, Positive Divergence

$AEZS suffered from the economic meltdown as the other biotech stocks, and we saw a big drop from the $2.20 area to find a support @ the $1.44 horizontal support line as I mentioned a week ago, we saw a bullish Long Legged Doji as a reversal candlestick, followed by a bullish hammer to confirm the reversal pattern, and nice run-up from $1.44 to $1.95 in a 5 trading days.
Long Legged Doji shows that there is a great deal of confusion and indecision in the market. This particular pattern shows that the prices moved well above and below the day's opening level, however they finally closed virtually at the same level with the opening price. The end result is only a little change from the opening price despite the whole volatility and excitement during the day that clearly reflects that the market lost its sense of direction.

After this run-up we can see a price consolidation crating a Pennant...
Pennant is a short-term continuation pattern that mark a small consolidation before the previous move resumes. These patterns are usually preceded by a sharp advance or decline with heavy volume, and mark a mid-point of the move.
 If we look at the indicators and the momentum, we can see a Positive Divergence giving us an indication about the direction...Breaking up the pennant will give us a great run-up toward the first resistant point @ $2.19

First of all, we have to watch the markets carefully, as the direction of the biotech sector effected from the global sentiment, and it will keep effecting $AEZS too, the coming days are very important for the markets as we saw a support in the SP-500 and a positive week, the biotech stocks will follow the markets these days, but they will have larger recovery as they suffered from a big drop, and the companies with the closest catalyst will enjoy from a great run-up if the markets find the real support and start moving side-way or upward.

AEZS have a great potential, with a late stage as the AEZS-130 (orally active growth hormone stimulating agent) On 7/26/11, announced completion of P3 trial under SPA as oral diagnostic test for adult growth hormone deficiency, preparing for pre-NDA mtg w/ FDA to support planned NDA filing in the second half of 2011.

Perifosine (KRX-0401) (PI3K/Akt pathway inhibitor anti-cancer agent) On 7/27/11,  $KERX the North American licensee, completed enrollment in the ongoing pivotal P3 trial for metastatic colorectal cancer, FDA Fast Track status with results expected by late 2011-early 2012

Disclosure: Long $AEZS

1 comment:

  1. Joe,
    You do a great job with your TA and written explanations. I appreciate your talent!