Saturday, May 08, 2010


Not every stock is going to hell in a hand basket.
Its first use recorded in the Oxford English Dictionary is in a historical work of 1865 by I. Winslow Ayer entitled The Great North-Western Conspiracy in All Its Startling Details, with the quote: "Thousands of our best men were prisoners in Camp Douglas, and if once at liberty would ‘send abolitionists to hell in a hand basket."
Thinking outside of the box, consider what stocks might be bucking the trend and doggedly holding onto their bullish trends?  Three that I am holding tight are NNVC, MMRF and a new pick sent out to subscribers early Friday:  AEZS
Æterna Zentaris Inc. operates as a late-stage drug development company specialized in oncology and endocrinology. Its lead oncology compounds include perifosine, an orally active PI3K/Akt pathway inhibitor that is in Phase III registration trial for multiple myeloma; and AEZS-108, a doxorubicin-targeted conjugate in Phase II for the treatment of advanced ovarian and endometrial cancer. The company’s lead endocrinology compound, AEZS-130, is an oral ghrelin antagonist in Phase III trial as a diagnostic test for Adult Growth Hormone Deficiency. Its pipeline also includes earlier-stage compounds, such as AEZS-112 that is in a Phase I trial in advanced solid tumors and lymphoma, as well as AEZS-120, an anti-cancer vaccine in pre-clinical development. The company was founded in 1991 and is headquartered in Quebec City, Canada.
Fact Sheet
Key Statistics
Uncovering  Next Dominant Cancer Company (Seeking Alpha)
"Essentially, what you get is a company that has a $90M market cap, while holding a clinical and oncology pipeline valued at more than $10B, given that they all reach positive marketing clearance from the FDA."

 AEZS Daily Trend Model

AEZS Weekly Trend Model

AEZS Monthly Trend Model

I don't usually look at or use the Monthly Trend Models, but in the case of AEZS, a monthly close above $1.76 would turn this model bullish. Also of interest in this chart are the highs seen in late 2006, above $6.00.  Almost four years ago, the pipeline was "early stage" and although I know market conditions are different this time, cancer is not, nor is health care, nor are the state-of-the-art pharmaceuticals available to counter diseases.  These are $Billion dollar markets that AEZS is addressing, while its current market cap is barely above $100M.

If ever there were stocks that are likely to march to the beat of their own drums, NNVC and AEZS are both prime candidates.  As long as their trend models are solidly up, holding these stocks in concert with a portfolio that is otherwise weighted on the current side of the market trends, i.e. down, makes sense to me.  Adding MMRF to the mix, we have a new mini-biotech basket of three solidly up-trending stocks in a down-trending market environment.



Anonymous said...

The ATR stop line you use...for exits, right...take entry signals from the software, right??

A said...

The "software" is eSignal that has the ATR algorithm available to its users. I tweak the parameters to match the nature of trading I am most comfortable with, but the underlying concept remains unchanged. It was my hope earlier in 2010 that this formula would provide me with a timely entry to the Trade of the Year. It looks like it has.

Anonymous said...

Looking at the charts and fibs and s/r points,seems like entry point now could be any correction down between 1.48 and 1.28 would be the price to anticipate.

Anonymous said...

it was a well done analysis from seeking alpha. this looks like a good prospect to consider

Anonymous said...

got your last update

Allan - Not quite sure what you mean -- should we still be positioned short for the weekly or should we exit our short positions?

A said...

SPX & QQQQ Daily and Weekly Models remain unchanged, still SHORT.