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It was a really weird, volatile, up and down day all day on Monday. A kind of consolidation, wedge-type day with no resolution, and a mixed close. A lot of stocks we follow had an interesting day. Some of them may be breaking back out. We might just have to wait and see. In the meantime, let’s take a look at some of them and see what’s going on and what to expect next.
Eleven Biotherapeutics, Inc. (EBIO) has a phenomenal chart. They recently signed an exclusive licensing deal with Roche, and keep on climbing. It’s a strong rising chart, great OBV, terrific Money Stream / Balance of Power, and great technicals. In the recent action, after spiking and pulling back for three days, it looks like it popped on Monday, up 31 cents to 5.09, or 6.5%, on 1.6 million shares. That’s a little bit of an increase in volume. I want to see this stock take out the 6.00 range, run up to 8-8 1/4, and then a lot higher down the road, but for now, let’s watch that.
Exelixis, Inc. (EXEL) has had a fantastic move, having gone from 3 1/2 to 11, and change, formed a wedge, broke back out, and on Monday, it was up 44 cents to 11.44, or 4%, on 7.4 million shares. That’s the best volume on an up day in a couple weeks. It looks like that if it could get through the spike high at 11.66, we may be looking at 12 3/4-13 short-term.
Nektar Therapeutics (NKTR) advanced 57 cents to 17.83, or 3.3%, on 785,097 shares traded on Monday. That was the best volume in two weeks. I’m convinced that when this one does go, it’s going to spike up to 20, and then maybe get to 22 1/2-23, the near-term targets. Look for it to break out of the 18 range, and watch it from there.
Puma Biotechnology, Inc. (PBYI) had a nice day on Monday, up 4.56 to 54.65, or 9%, on 1.2 million shares. It appears this stock is at key resistance at the 55 1/2-56 range. Monday’s high was 55.43, so it’s right there. A punch through here is likely to get it up toward 68, which is the next target.
Stocks on the long side included Advaxis, Inc. (ADXS), Alder Biopharmaceuticals Inc. (ALDR), Arrowhead Research Corp. (ARWR), A10 Networks, Inc. (ATEN), ProShares Ultra Nasdaq Biotechnology (BIB), Direxion Daily S&P Biotech Bull 3X ETF (LABU), Cardiovascular Systems Inc. (CSII), Eleven Biotherapeutics, Inc. (EBIO), Exelixis, Inc. (EXEL), Novatel Wireless Inc. (MIFI), Momo Inc. (MOMO), Nektar Therapeutics (NKTR), Puma Biotechnology, Inc. (PBYI), Progenics Pharmaceuticals, Inc. (PGNX), Resolute Energy Corporation (REN), Rovi Corporation (ROVI), Twilio, Inc. (TWLO), and Valeant Pharmaceuticals International, Inc. (VRX).
Days to cover is the amount of short interest divided by the company's average daily share volume. In other words, the number of days required to close out all the short positions. A higher number means more potential fuel to a stock’s rally as shorts cover, and thus accelerate the move, when the stock’s price rises.
On Balance Volume (OBV), developed by Joe Granville, is a running summation of volume on up-days minus volume on down days. OBV rises when volume on up days outpaces volume on down days -- and falls when volume on down days is stronger. A rising OBV reflects positive volume pressure that can lead to higher prices. Conversely, falling OBV reflects negative volume pressure that can foreshadow lower prices.