Sometimes it's amazing what little snippet or detail can turn the tide for a biotech stock like Hemispherx BioPharma, Inc. (AMEX:HEB). Then again, such is the nature of biotech, where the market can see what it wants to see, ignore what it wants to ignore, and change its mind at the drop of the hat. It looks like traders have changed their minds on HEB too.
The stock's up 14.2% this morning following news that really shouldn't be a surprise, and news that is actually a double-edged sword. The company bought some time to complete work on its flagship drug development; some would argue that Hemispherx BioPharma has had time to get it all together (more than two years since the therapy was sent back to the drawing board). The majority of the market, however, feels the announcement changes the game for the better.
That's what a chart of HEB says anyway.
There's actually more going for it than just today's big pop, but one has to take a step back and look at a longer-term chart of Hemispherx BioPharma to appreciate it. On the nearby weekly chart it's pretty clear that (1) HEB is starting to trend higher, and (2) is doing so on rising volume. It's still nowhere near offsetting a miserable pullback in 2010 and 2011, but the last month and a half have been the most encouraging the stock's seen since swine flu mania back in 2009. Indeed, that steep pullback may just be making the bullish/long opportunity that much juicier.
That's not to say it's bulletproof just yet though, especially on a technical basis.
When we zoom into a daily chart of HEB, it's easy to appreciate the effort the bulls are making. But, the bulls still haven't crossed a key hurdle that's become well-established over the past month and a half.... the 100-day moving average line (gray) at $0.26. That's where the December rally effort stopped, and where yesterday's advance was halted as well. It hasn't turned it into a full-blow n downtrend for Hemispherx yet; today's gains are evidence that the bulls are still interested. However, there's obviously something to the mental hurdle.
It's also with the daily chart we can see just how much buying interest has grown, judging from the number of tall bullish volume bars. More than that though, this daily chart verifies the bullishness in HEB was in place before today's news. Today's news is just a min-prod in a bigger uptrend that's been developing since November... an inevitable eventual turnaround for most biotech stocks - nothing lasts forever, good or bad. Anything above $0.26 could really turn the tide for the better.
And the reason? As was said, today's press release is getting the credit, but this is bigger than that news (which was barely 'news'). This is just one of those things - and they happen more than investors care to admit - where HEB is the beneficiary of the swing of a pendulum. No need to look a gift horse in the mouth.