Aug 27, 2010 10:04 AM PDT
It had been so long since we discussed a possible breakout from GenVec Inc. (GNVC) that we'd almost forgotten about it. The big jump yesterday was a good reminder of just how much upside there could be here.
The stumbling block for GenVec was the triangle shape the chart had been forming for months now. It's been coming to a point for quite some time, but we never expected GNVC to make it this far into the tip. The squeeze finally got strong enough this week, pushing the stock above the upper edge of the zone. The volume behind the move is a confirming clue.
From here, it would be smart to wait for GenVec to cross above $1.04 before jumping on board. That's where the stock suspiciously topped yesterday as well as today, so there's something about that level. This is still a great breakout move though.
Bad news for all you MannKind Corp. (MNKD) owners who thought the bleeding might stop at $6.04, where shares were finding support last week. Today's low of $5.60 snapped the support line.
It was a good fight though, and not surprising where it happened. The $6.04 level was a key Fibonacci retracement line for MannKind Corp. shares, and if anywhere, we would have expected to see a rebound at that mark. Given that the Fib lines have been so important to MNKD though, we can't dismiss the way this one broke. The selling volume is growing as well.
The next potential floor for MannKind - being realistic - is the March low of $2.00.
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Normally we steer clear of bulletin board stocks simply because their strength can come and go like the wind. NeoMedia Technologies Inc. (NEOM) is exception-worthy, as its strength and rally has matured quite convincingly.
The chart below says it all. NeoMedia was in a downtrend from March through September, but reversed course on September 14th. Since then, we've seen a string of higher highs and higher lows from NEOM. Best of all, buying volume has been plentiful.
The aspect we can appreciate the most with the NeoMedia chart is how well paced this rebound has been. Normally, stocks that turn on a dime and race out of control end up being reeled in later. NEOM has just walked higher, meaning this trend is very sustainable.... no need to wait for a better entry - this is as good as any.
Finally, Cyclacel Pharmaceuticals, Inc. (CYCC) is trying to get some breakout traction, but hasn't yet. As such, we can only recommend putting the stock on your watchlist for now.
No doubt about it - the volume behind the jump from Cyclacel Pharmaceuticals is a solid sign that there are buyers. However, we're not going give CYCC the benefit of the doubt on just one day's strength. We saw something similar in late August, and the stock really didn't do anything with it then (lacked follow-through).
In taking a step back and looking at the bigger picture, you can see the problem.... CYCC is range bound between $0.80/$0.88 and $1.24. If Cyclacel Pharmaceuticals can break that ceiling at $1.24 - which it didn't do in late August - then this could be a very trade-worthy chart. Until then, we're not overly impressed.
If you'd like to know of any changes in our opinion of GNVC, MNKD, CYCC, or NEOM (or if we officially recommend them as trades), be sure to sign up for our free newsletter today. It's delivered 2 to 3 times per week.
