Three Bulls Ready to Charge: CUR, STOA, and ARNA Under the Microscope

Jan 16, 2013 6:30:05 AM PST | 580 View(s) | No Comment(s) - Post a Comment Rating

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StockHQ:

ARNA
$7.96 $0.00 0.00%
CUR
$1.45 $0.00 0.00%
STOA
$0.00 $0.00 0.00%

The overall market may be taking a nap right now while investors get their bearings, but that doesn't mean all stocks are asleep on the job. Arena Pharmaceuticals, Inc. (NASDAQ:ARNA), Neuralstem, Inc. (AMEX:CUR), and Sitoa Global Inc. (PINK:STOA) are alive and well, and seem to be pretty good bullish bets right now. Take a look.

The nearby daily chart of Neuralstem, Inc. shows some basic bullishness - we've seen higher highs and higher lows since November, and the broad uptrend is still going strong. But, to really appreciate just how much upside there is for CUR right now, you have to see this weekly chart.

What does the weekly chart show? For starters (and primarily), it shows that CUR has formed a well-defined V-shaped reversal, with the bottom of the V being the capitulatory plunge an August. Though the rebound move right out of the gate was too strong for its own good in September - Neuralstem pullad back to its key moving average lines - since then the bulls have regrouped and begun to make an upward move at a more sustainable pace. Thing is, there's still a ton of room to keep rallying... ground that was lost in 2011 and 2012.

The nearby daily chart of Arena Pharmaceuticals, Inc. looks compelling. Shares were stuck under the $9.41 mark for weeks, but once they pushed above that ceiling, they didn't look back. Better still, this particular move from ARNA has unfurled on high volume, which up until this point had been the missing ingredient with all the other rally attempts (each of which ultimately failed).

To really grasp how big of a deal this is for ARNA, though, you'll want to see this longer-term [but still daily] chart. See, this stock has been held under - repeatedly - the $9.41 ceiling. The longer it stays trapped under a hard line, the more powerful and big the breakout move is once it's unleashed. Just think of it as a pressure cooker. The longer it builds, the more violent the release of all that energy is. Though Arena Pharmaceuticals looks a little overbought in the very short term, the bullish damage has been done; the market's falling in love with this stock again.

Last but not least, Sitoa Global Inc. may have disappointed a lot of hopeful traders when it didn't follow-through after last Wednesday's breakout move to a peak of $0.07. But, perhaps those traders were simply expecting too much at the wrong time. Or, perhaps STOA simply traveled further than a price the market could support at the time. Or, maybe it was a combination of both of those things. Either way, shareholders paid the price. The stock tested $0.07 again on Thursday, turned tail, and gave up more than half the ground it had gained.

So what? The "so what" is the fact that STOA looks like it's going to take flight again, only this time, it's apt to rally at a sustainable pace. Notice how the 50-day moving average line acted as a floor.... for three days now. Notice how the bullish volume behind yesterday's modest gain was huge volume. There are buyers waiting in the wings - they just want to buy on the way up, but not pay an insane price. They're going to get that chance with Sitoa Global in the latter half of this week, and pressure it higher as a result.

James E. Brumley is a paid contributor of the SmallCap Network. James E. Brumley's personal holdings should be disclosed above. You can also view SmallCap Network's complete disclaimer and disclosure.