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To use the BLOG, simply go
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- the BLOG will scroll down automatically on the right side of your
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FYI: NetWork Installation (NWKI)
has changed symbols temporarily. It now trades under NWKIE- the
E being added because the company needed an extension to file it's 10K
annual audited financial. This is not a big surprise as they changed auditors
near the end of February. I expect the company to take a few more days
to get it's 10K filed, and the E will then be removed.
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Biotechs Continue
to Look Good; Two More Trading Ideas |
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Here's a chart of the Drug Index,
which I chose since we showed you the Biotech index in the last edition.
As you can easily see, the drug index has rebounded nicely from the February
lows in a market environment where most stocks are getting killed.
I continue to believe the biotech
stocks will be the major leading group to bring us out of the vicious 2005
sell off. It appears we might have a month or two of positive performance
in the markets before embarking on what I believe will be a torturous low
volume summer.
Look for the seasonal patterns to
repeat themselves roughly in concert with last year. In March and April
of '05 we experienced the kind of brutal sell off we had in May and June
of '04. Perhaps that means the lows will be made in mid July instead of
mid August.
Fresh off our long over due win in
Protein
Design Labs (PDLI) which yielded 15% in a few days, our crack technical
team has been scouring the biotech sector for other trading opportunities.
Here's a couple more biotech stocks
for a 30 day trade in what I hope will be an improving market climate out
in front of the summer doldrums:
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Ariad
Pharmaceuticals (NASDAQ: ARIA) |
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Ariad Pharmacueticals is the
riskier of the two ideas as it is a pre revenue company. They have complete
Phase I and II clinical trials for a new cancer therapy,and are moving
into Phase III.
AP23573, ARIA's lead product
candidate, is a potent mTOR inhibitor that starves cancer cells and shrinks
tumors by regulating the response of tumor cells to nutrients and growth
factors and by controlling tumor blood supply and angiogenesis through
effects on vascular endothelial growth factor. Currently, AP23573 is in
multiple Phase 2 and 1b clinical trials in patients with rhematologic malignancies
and solid tumors.
AP 23573 was recently granted "fast
track" status by the FDA for Phase III clinical trials, which means the
druq will be used to treat forms of cancer that don't currently have effective
therapies.
Brokerage firms Adam Harkness and
Lazare Freres have both initiated coverage on this stock in the last two
months and rated it a "Buy".
As depicted in the lower panels of
the chart, both the MACD and Detrended Oscillators are moving up. Both
of these technical indicators suggest the stock is under accumulation.
The ideal entry level for ARIA
is $6. I believe this stock could trade to $7 or $8 in the next 30 days
if market conditions improve. Use $5.49 as a mental stop as the market
makers might want to take this one down and clean everyone out before turning
it back up.
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First
Horizon (NASDAQ: FHRX) |
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First Horizon is a less risky
idea as the company already generates $150 million plus in annual revenues,
and delivered $.72 per share in earnings in '04.
FHRX sells 12 products, most
of which treat recurring or chronic conditions or disorders. The stock
made a high of $26 last October before being taken out to the woodshed
and beaten down.
Revenue grew 59% at FHRX from
'03 to '04. The company is on a tear fundamentally.
As you can see from the chart, the
stock has completed a perfect 38.2% retracement from a recent high of $18.
With the MACD starting to move back into positive territory, this stock
could be getting ready to make another run.
A purchase in the $17 range is suggested
for a thirty day trade in an improving market. Be prepared to risk 1 point.
Keep your mental stop loss at $17, and look for a profit objective in the
$18.80 to $19.80 range over the next 30 days.
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