With the fiscal cliff being avoided, plenty of stocks seem to have become trade-worthy. Don't get suckered in to a strictly-bullish mindset though, as not all of today's big movers are up for a repeat performance. The best of the best trading possibilities (for the time being) are Herbalife Ltd. (NYSE:HLF), Synergy Pharmaceuticals Inc. (NASDAQ:SGYP), and Alexza Pharmaceuticals, Inc. (NASDAQ:ALXA)... and not even all of them for bullish reasons. Take a look,
Synergy Pharmaceuticals Inc. is up a whopping 17% this morning - as of the last look - which is about as good as it gets for a stock for just one day. That's the rub... this may be as good as it's going to get for SGYP, at least for a while. And, the shape of the bar today underscores the reversal potential after today's pop.
It's still a little early in the session to assume SGYP is going to close at its current price of $6.15. Then again, to the extent that the bulk of its volatility is over (which is probably quite a bit), we can take the present bar at face value and at least say it has doji-like qualities. And, since dojis are often reversal bars, our doji today suggests Synergy Pharmaceuticals may be due for one now, especially after the big bullish gap. It's simplistic, but powerful.
Just for the record, I've been touting Alexza Pharmaceuticals, Inc. since late November, remarking how the stock's been fighting its way out of a long-term downtrend and into an uptrend. Though the stock's been all over the map since then [sometimes for the better, sometimes for the worst], ALXA has never really fallen out of its new bullish trend lines. More important right now, the stock is at the trough of what looks like a short-term pullback within that bigger-picture uptrend, finding support in all the right places.
If the nearby chart makes it look like ALXA has found support at the 100-day and 200-day moving average lines, you're not crazy - it has. Better still, we've seen hammer-shaped bars [opens and closes near the high] for the past five trading days, and a string of higher highs and higher lows for the last couple of days. It's admittedly tough to step into a falling knife like Alexza Pharmaceuticals is right now, but a closer inspection says the chart's on the mend, and may be brewing up yet-another pop. Again, it's simplistic, but powerful.
Finally, though I've got to give credit to Bryan Murphy for calling the bottom - a couple of times - on Herbalife Ltd., I've also got to call them like I see them as they are right now. And as of right now, HLF looks like it's ending the post-plunge rebound move, and entering a flat period if not a near-term pullback.
Again, the shape of today's bar (juxtaposed against the strong rally over the prior four days) is the clue. Not only are wee seeing another doji bar today [remember, dojis imply the transition from one trend to another], but today's buyers are already starting to feel the weight of this morning's gap. Herbalife Ltd. has already bounced 30% in five trading days. Though today's clearly a bullish day, there's no way we're going to see bullish volume today as firm as we've seen it since late last week. If you're in a trade, the best move may simply be to lock in your gains now and let the chart regroup. It's straining too much now to gamble on more rally.