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Technical Chart Review - ADLS, HEB, BIEL

|Includes: ADLS, BioElectronics Corp. (BIEL), HEB

Trading shares of Advanced Life Sciences Holdings, Hemispherx, and BioElectronics requires more than just reading the news - read the charts as well.

If a trader's looking for clues about what to expect in the near future from Advanced Life Sciences Holdings, Inc. (OTC:ADLS), Hemispherx Inc. (NYSEMKT:HEB), and BioElectronics Corporation (OTCPK:BIEL), a review of their technical charts may reveal as much as any news or announcement will. 

Today's supposed to be the decision day for Restanza, the community acquired pneumonia (CAP) treatment from Advanced Life Sciences Holdings, Inc. (ADLS.OB). The original review committee said Restanza (cethromycin) was safe, but not effective enough. However, the FDA doesn't necessarily have to follow the committee's advice - it could still be approved.

Either way, the FDA established a Prescription Drugs User Fee Act (PDUFA) date of July 31, 2009 for the Restanza NDA. Things can and do get delayed, but for now, today should be the day we hear something.

Based on the chart though, the market appears to think Restanza will not be approved. ADLS shares are barely hanging onto support (blue). If that line at 45 cents breaks, there's a small chance that 40 cents could halt the implosion. More likely though, ADLS could make its way back to the 15/20 cent area. A non-approval should be the trigger.

Hemispherx Inc. (HEB) may have captured the market's heart and mind in May, based on high hopes for Ampligen as a swine flu vaccine as well as a treatment for chronic fatigue syndrome. Unfortunately, the market can't wait forever for one or both of those things to pan out. Investors, bored and tired and growing impatient, have pushed the stock to its trading brink.

The line in the sand for HEB shares is the $2.00 level. That's roughly where the stock bottomed in early July, and it's also roughly where a key Fibonacci level is resting. Considering Hemispherx is already trading under a major intermediate-term support line (blue), a break under the $2.00 mark could lead to a total freefall.

A quick glance at a chart of BioElectronics Corporation (BIEL.PK) might suggest the stock is headed much lower, with more than a little bearish momentum. However, knowing the back-story - and seeing how trading volume has shaped up - suggests things may not be all that dire.

The June/July runup was excessive, no doubt about it. Investors got overly-excited about a couple of 510K applications (requests for the FDA to approve a device) that would add to the BioElectronics family of pain management products. Once the euphoria wore off though, shares started to sink.

Another case of hype-then-bust? Maybe not. Notice the volume hasn't been all that strong on the selling days. On the up days though, volume has been persistently strong. That can't change the fact that BIEL was overbought and now needs to be reeled in, but as long as the second Fibonacci retracement line at 61.8 cents holds up, shares aren't a total liability.

The fact that the stock didn't jump on Wednesday when BioElectronics announced they'd be filing an FDA application (for OTC Clearance) for its musculoskeletal pain treatment confirms that this initial bullish wave is fully exhausted. Time to regroup.

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