Day Trading with Hary Boxer

Today, the Chart of the Day is VIVUS, Inc. (VVUS), which had, what I would call, a game-changing day, with nearly 75 million shares traded, more than its entire float. The stock leaped 70% up from 4.89 to 11.80 with the high of 12.49. But the reason I call it a game-changing event is because it has a massive 10-year base pattern, the highs in early ’00, early ’02 and early ’04 as well as the top of the channel, which I’ve drawn in on the chart that extends from early’05 to present, were all taken out today. Not only that, but with a huge gap, and the stock held the majority of its gains as well, closing with a massive session, actually up another 25 cents or so in the aftermarket

The intraday 1-minute chart shows a gap, a big gap, then a quick run up to the 12.00 range, backed and filled and moved higher, then got up to the high for the session at 12.49. Then there was a two to three hour coil, an attempted breakout that occurred around 12:30 with a high volume surge, a pullback and then a three wave affair, which did not follow through, and then backed and filled, and reversed after reaching the trendline on two occasions, holding the intraday trendline. Another late surge took it from 11.65 up to 12.44 to challenge the old high but couldn’t quite get through, then backed off to the close on profit-taking. But it’s back over 12.00 in the aftermarket. The reason I call it a game-changing event is, apparently, they have a diet pill that’s the best thing that’s ever been put on the market, and it has huge consequences for this company’s future, not to mention a potential takeover.

But with all areas of resistance taken out, one of two things will happen. Either it backs and fills, and maybe backs off and retests the gap, but I doubt that it gets much lower than that, but if it does, it will be cause for exit. But a takeout of the 12.50 area, which was today’s high, could lead to much higher prices, perhaps into the mid-to-high teens. I will be looking for the next move and trading target up around the 15.00 level for VIVUS.

We’ll see how it goes over the next few days and how it sets up.