$AEZS suffered from the economic meltdown as the other biotech stocks, and we saw a big drop from the $2.20 area to find a support @ the $1.44 horizontal support line as I mentioned a week ago, we saw a bullish Long Legged Doji as a reversal candlestick, followed by a bullish hammer to confirm the reversal pattern, and nice run-up from $1.44 to $1.95 in a 5 trading days.
After this run-up we can see a price consolidation crating a Pennant...
Pennant is a short-term continuation pattern that mark a small consolidation before the previous move resumes. These patterns are usually preceded by a sharp advance or decline with heavy volume, and mark a mid-point of the move.
If we look at the indicators and the momentum, we can see a Positive Divergence giving us an indication about the direction...Breaking up the pennant will give us a great run-up toward the first resistant point @ $2.19
First of all, we have to watch the markets carefully, as the direction of the biotech sector effected from the global sentiment, and it will keep effecting $AEZS too, the coming days are very important for the markets as we saw a support in the SP-500 and a positive week, the biotech stocks will follow the markets these days, but they will have larger recovery as they suffered from a big drop, and the companies with the closest catalyst will enjoy from a great run-up if the markets find the real support and start moving side-way or upward.
AEZS have a great potential, with a late stage as the AEZS-130 (orally active growth hormone stimulating agent) On 7/26/11, announced completion of P3 trial under SPA as oral diagnostic test for adult growth hormone deficiency, preparing for pre-NDA mtg w/ FDA to support planned NDA filing in the second half of 2011.
Perifosine (KRX-0401) (PI3K/Akt pathway inhibitor anti-cancer agent) On 7/27/11, $KERX the North American licensee, completed enrollment in the ongoing pivotal P3 trial for metastatic colorectal cancer, FDA Fast Track status with results expected by late 2011-early 2012
Disclosure: Long $AEZS
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