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Spectrum Pharmeceutical Technical Trends 07/27/09

Spectrum Pharmaceuticals closed on 07/27/09 exactly on the 61.8% Fibonacci retracement ($6.63). This is a significant point to close at or above. With a strong push upwards, there is nothing standing in the way between $6.62 and $7.65 which is the high point of the retracement series. There are of course the natural $7.00 and $7.50 levels, but these are generally weaker levels of resistance than the Fibonacci levels. In addition, if SPPI pushes higher quickly, it may create a panic. Short interests increased from 1.5M shares to 4.7M shares as of July 27. It's not unconceivable to see a short squeeze like there was with JAZZ today. The difference is that shorts held 25% of the float in JAZZ whereas SPPI shorts hold 14% of the float.

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