Technical Outlooks for CRXX, CBLI, and DDSS

The bulls apparently don't have what it takes to make it three in a row, reaffirming the idea that the best way to play in the current environment is to be able to trade both sides of the market, and focus on only the best movers. With that in mind, we've identified Labopharm Inc. (NASDAQ:DDSS), CombinatoRx, Incorporated (NASDAQ:CRXX), and Cleveland BioLabs, Inc. (NASDAQ:CBLI) as worth discussing.... not necessarily as potential movers, but also as stocks that look like they could move but really aren't well-positioned.

Before getting too excited about the apparent strength from Cleveland BioLabs, Inc. (NASDAQ:CBLI) over the last month or so, let me put things into perspective - there's a ton of overhead resistance that could bring a quick end to the CBLI rally.

In fact, above all else, CBLI has been range-bound since May of last year. The lower edge of that zone has been $3.31, while the upper side of it is at $4.49. Yes, for a brief while in the middle of last year, Cleveland BioLabs, Inc. trades above $4.50. Since then though, $4.49 seems have renewed itself as a ceiling.

I only bring it up now just to let you know where the tripwires are. I hope for all the owner's sakes that Cleveland BioLabs can get over both humps (there's another one at $4.89). Until that happens though, CBLI is just another mediocre prospect.

Finally! I've been waiting for weeks for Labopharm Inc. (NASDAQ:DDSS) to make the move it's made today. Now that it has, we can close this chapter of the DDSS saga out. Oh, and just for the record, we're not leavings things behind on a bullish note - I think the stock's actually at an intermediate-tem top.

What? Yeah, yeah...  I know that's going to be an unpopular and minority opinion. That's ok.  Just let me explain my view on the Labopharm Inc. chart, and I think you may end up agreeing.

As I noted in my last update on the DDSS chart from January 19th, the stock's been rising a rising support line higher, but has been on an intercept course with horizontal resistance at $3.00 the whole time. You can see that Labopharm topped there in mid-2009, but what you can't see is that the stock also topped there in early 2008, and that $3.00 mark was also the inflection point following the 2007 plunge. That's just a few too many peaks at the same level for me to ignore.

Care to guess where Labopharm Inc. peaked today before rolling back to the current price of $2.69? It opened at $2.95 and hit $2.99 before falling apart. I think this is the pivot/reversal point to a move lower... at a major wall that's been in place for years. The volume spike confirms the likelihood that today's a pivot point.

Food for thought: The company's never going to tell you when it's time to sell.... that's up to you and you alone. For me (and Warren Buffett), I think the time to get out is when everybody else wants in.


Just a quick update on my January 26th look at CombinatoRx, Incorporated (NASDAQ:CRXX)... in short, the stock's done everything I needed to see it do to cement my bullish outlook in place. In other words, I'm calling CRXX a technical buy. 

As a reminder, all I wanted to see (though it was a tall order at the time) was CRXX make good on the break above the steeper falling resistance line (blue). And, it did. In fact, it's also busted above the other falling resistance line (green) that I wasn't even showing you at the time. The final straw came when CombinatoRx broke above the horizontal resistance at $1.14.

The encouraging part about the chart isn't the strength of the move, but rather, how CRXX has been pushed lower after crossing each milestone, and then fought back to reach higher highs. Between that and the increasing number of accumulation bars, I really think CombinatoRx, Inc. shares have a shot at getting back up to $1.85 at least, and ideally up to the $3.00-ish area where there's still a lingering gap from late 2008.