Believe it or not, despite the market's drubbing today, there are some stocks that are worth tiptoeing into right now. Among the best of the best are Alexza Pharmaceuticals, Inc. (NASDAQ:ALXA), Alon USA Energy, Inc. (NYSE:ALJ), and Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI). Here's why.
Today's 5.6% pop from Alon USA Energy, Inc. is impressive, but it might be easy to overlook just how impressive - and important - it is. Because of this move, ALJ has hurdled a key ceiling that extends all the way back to early 2011. The nearby chart says it all. While the stock has been trapped below $14.60 since September, we can actually see that $14.60 level's been a problem since April of last year. Point being, now that the wall has been knocked over, this chart is free to keep rolling.
ALJ is in independent refiner of oil and gas... as opposed to the more commonly found independent explorer. The refining business is a lot more stable (and a lot less costly) than oil and gas exploration, making Alon USA Energy that much more compelling from the start. The 'big news', however, is that the company is on the verge of paying a big cash dividend following the IPO of its MLP Alon USA Partners. Either way, the chart says ALJ is off and running.
Spectrum Pharmaceuticals, Inc. has actually been working on a bullish reversal since November 8th, when it hit a new multi-week low of $10.11, only to reverse course that very same day and close at $10.64 (forming a nice hammer-shaped reversal bar in the process). And sure enough, we've seen a string of higher lows in the meantime. As of today though, SPPI has put the finishing touches on the turnaround effort, crossing above the 20-day and 50-day moving averages. Granted, we've seen this move before (in late November) to no avail, but this time really is different. This time, there's some longevity.
SPPI is a biotech name with a decent pipeline, and a compelling menu of revenue bearing products. But, the current buzz is all about Belinostat - a cancer treatment aimed at T-cell lymphoma currently in Phase 2 trial. What makes Spectrum Pharmaceuticals a buy-worthy standout (with or without the technical cues) is the fact that it's profitable, and will be going forward.... something most small cap biotechs can't say.
If the name Alexza Pharmaceuticals, Inc. rings a bell, it may be because yours truly has been talking about it - bullishly - for a couple of weeks now. Simply put, I had a feeling the cross above all of its key moving averages (not to mention several key bullish crosses OF key moving averages over one another) meant ALXA truly was on the path to gains. After today's and yesterday's moves to new multi-week highs though, there's no way of denying it. The nearby daily chart illustrates how it all went down, but to fully appreciate why this bowl-shaped reversal has such bullish ramifications, you have to check out this weekly chart. This is major snap of a long-term losing streak.
ALXA is a biotech company with five drugs in the pipeline, though there's little doubt as to the one that's causing the stir now. It's ADASUVE, for migraines. Europe's drug administration screening board recommended that the Union's equivalent to the FDA approve the drug there. Oh, and the FDA (the United States FDA) is likely to hand down a decision on ADASUVE today for approval (or not) in the U.S. Needless to say, this could be a huge catalyst for Alexza Pharmaceuticals, and all signs point to it being a bullish one.