Category Healthcare

Arena Pharmaceuticals (ARNA) : Break kumo and let the speculation begins

Arena Pharmaceuticals has started to break out of its resistance and is now heading higher.

One of the early catalyst was ARNA signing up with a marketing or sales partner.

And the second catalyst is FDA assessment of Vivus drug potential ( Note : Vivus is ARNA competitor).

The key thing to note here is good news for any of the drug company is good news for the industry. In this case, Vivus, ARNA will benefit from the same positive news.

Currently, ARNA is trading at around 4.39 and I believe there is still time to play this game. I recall ARNA is only due for review in September.

Myself, I have bought Oct $3 CALLs way back in May-June period.

Do note that as with all stocks that relies on FDA approval, there is a high chance that things do not work out well and the price will head south.

China-Biotics, Inc. (CHBT) : Chart Review

Background.

A member in the forum ask about CHBT.

Personally, I am not into FA and do not know how to dissect the earnings reports.

From what I can gather, CHBT suffer a drop in share price based on 2 possible reasons:

1. share dilution as they raise more cash (but did not highlight how they want to use it)

2. validity of their business and audited reports.

Point 2 above is more than enough to send any company down the drain (recall Enron).

Nonetheless, the focus of this post is to evaluate if there’s any buying merit for CHBT based on charts.

Daily Chart

From the Daily Chart, we can see that the Kijun sen (trendline) has start to flatten. And this suggest that CHBT has stabilise between $12 and $13; with $12 as a pretty good support.

However, at this moment, there isn’t any setup to show that it will go up.  We can also see resistance from the leading kumo at around $12.91

Weekly Chart

On the Weekly Chart, the support at $12 is even clearer. It is now sitting right on the kumo support.

However, even the Weekly Chart’s leading kumo seems to suggest that the trend has change and there seems to be a kumo twist ahead.

In other words, if $12 doesn’t hold, there is a chance that CHBT will breakdown further.

It is likely to face a fair amount of resistance as it tries to head higher; $13 on the Daily and on Weekly Chart, we can see kumo resistance at $14.49

Until CHBT’s chart can tell a better story, I can’t find a good reason to buy.

Immunomedics Inc (IMMU) : Kumo breakout

Immunomedics (IMMU) has just breakout of the kumo resistance.

Next resistance is around $4.30.

Volume is already higher than average within the first hour.