Cypress Bioscience: About To Reverse Course?

Cypress Bioscience, Inc. (CYPB) is a favored stock for selling covered calls. But on Thursday (8/14) and Friday (8/15) last week, 1,000 Dec. call options and 1,000 Dec. put options at the strike price of $7.50 were purchase on each of these two days.

This may be indicative of an upcoming event between now and December, which could result in a dramatic price move in the stock, either up or down. The million dollar question is in what direction?

In search of clues, the open market purchase of 10,000 shares at $7.50 on June 10 [the day after the Annual Meeting of Stockholders] by a trust with indirect beneficial ownership for Michael Walsh, CYPB Executive Vice President/Chief Commercial Officer stands out. Mr. Walsh was the founder, president and CEO of Proprius Pharmaceuticals, which was recently acquired by CYPB in March this year.

A second clue is provided by Technical Analysis. CYPB appears to be near the intersection of two Fibonacci fan lines and a Fibonacci arc, which may also be indicative of a change in price direction.

click to enlarge

Disclosure: Long CYPB

Comments

[Urbane Gori...:]

Jeez! Someone let your kid play with his 'Spirograph'.... jegan ;-)

2008 Aug 21 06:03 PM

[Furd Turgeson:]

You have got to be kidding with that chart. What a buffoon.

2008 Dec 08 10:01 AM