Sep 10, 2010 8:47 AM PDT
Well, it's certainly not the way I had envisioned this happening for InfoLogix, Inc. (NASDAQ:IFLG), though the net effect looks like it's going to be the same. What's that? This small cap is pointed higher, and is an intermediate-term 'buy'.
My initial assumption was that InfoLogix shares were going to propel themselves from the lower edge of the wide trading zone (framed in orange) to the upper edge of the same zone, around $15 or so. A lack of follow-through (or perhaps too much volatility) quelled that rally effort early on, but take a look at what happened in the meantime.
Though it's obscured by all the ups and downs, IFLG actually handed over several bullish moving average crosses (mainly the 20-day and 50-day over the 200-day) over the last three weeks. Better still, the 200-day line is now sloped upward rather than downward.... a true testament that the 'bigger picture' trend is bullish. Some short-term resistance lines (blue) were also knocked out of the way.
This may mean a slower, less-explosive rally than originally hoped for IFLG, but this is also a healthier (more sustainable) one. I'd step in if InfoLogix, Inc. shares can just get back above the 50-day average line at $5.61.
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I'm going to assume that if you're reading this, then you already know what the right thing to do with Momenta Pharmaceuticals, Inc. (NASDAQ:MNTA) at this time is. On the off-chance you don't though, I'll make it clear - sell it, take profits, get out, etc. This small cap is itching to implode after its one-day wonder rally from Friday.
To be fair, my near-term bearish outlook has nothing to do with the merits of Momenta Pharmaceuticals as a company. It's a perfectly fine company. It's just got to do with the stock, and the fact that MNTA launched itself and is now too far out of reach for new buyers. The fact that it actually hit new highs on Monday on less volume is a major red flag that it simply outpriced itself (or at least did so too soon).
I'm looking for a retreat to the $17-ish area before it's all said and done. After that, it should be safe to wade in again.
And finally, do you have a few extra bucks you're willing to gamble with (and I mean 'gamble' in the truest sense of the word)? Then I recommend GenVec, Inc. (NASDAQ:GNVC).
If it rings a bell, it may be because this is actually not the first time I've posted a bullish opinion on GNVC following its destruction in March. As I footnoted then, it's a speculative 'bottom fishing' play, but a high-odds one.
With my last update from June 1st, the only complaint I had about this small cap at that time was how there wasn't enough volume behind the bullish efforts to sustain them. Well guess what - we're getting that volume now, and GenVec shares are indeed moving higher. They also moved above the 50-day moving average line (purple) today.
I still say the horizontal resistance line (orange) at $0.62 is the final line in the sand for GNVC, but I've got a feeling what we're seeing today is a glimpse of what's coming. Worth a swing anyway. 
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