Charts of Energy Conversion Devices, Hard to Treat Diseases, Hemispherx Biopharma, and Nephros are dropping a few key hints as to what's next.
With news starting to wear off, and with traders starting to face tough buy/sell decisions, the hints provided by most stock's charts are becoming crucial in deciding what to do next. Here's a technical review for charts of Energy Conversion Devices, Inc. (NASDAQ:ENER), Hard to Treat Diseases, Inc. (OTCPK:HTDS), Hemispherx Biopharma, Inc. (NYSEMKT:HEB), and Nephros Inc. (OTCQB:NEPH). Each poses a unique opportunity, though not necessarily to the upside.
It may be a little premature to say Energy Conversion Devices, Inc. (ENER) shares are trapped in a wedge. There's a clear falling resistance line that was touched most recently in late July, but the lower support line from early this month may not mean as much as it appears to (it's easy to draw a line between two points). Nevertheless, it's what we've got to work with - that triangle will be coming to a point soon.
The move to the lower side of the wedge stemmed from last week's downgrade. Piper Jaffray decided ENER should be underweighted. Given the average analyst's penchant for absolutely terrible timing though, perhaps that downgrade is the ultimate buy signal.
By the way, Energy Conversion Devices has beat earnings estimates in all of its last four reported quarters. It makes one wonder if Q2's numbers (to be out soon) will once again surprise the market to the upside. The wedge is still the trading framework though.
Hard to Treat Diseases, Inc. (HTDS) may be nearing the end of its fifteen minutes of fame. The stock's started to press higher again after fading from a major upside surge three weeks ago. What's missing from Hard to Treat Diseases' recent chart bullishness, however, is volume.
You may recall HTDS popped up on out radar a few days ago (following the jump $0.001 to $0.005) when the company announced a TV clip that put the company in a positive light in Europe would seen be playing here in the United States. We said it was a flimsy reason to buy shares then, and we're sticking to our guns.
In the meantime we've heard some news that's a little more significant, though not concrete by any means - Hard to Treat Diseases is bidding on a couple of flu vaccine opportunities in Chile. It's still not strong enough to count on though.... time to take profits.
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Hemispherx Biopharma, Inc. (HEB) continues to knock down support levels as fast as they can be plotted; the most recent setback came last week. There's another support level (horizontal) at $1.88, and if that one fails as well, there's not going to be many places left for HEB to find a foothold.... at least not until the 50 cent area is revisited. As such, a break under $1.88 poses a very enticing downside/short trade.
By the way, Hemispherx reported quarterly results this morning... nothing unusual for a biotech company that's got more in the R&D pipeline, like Ampligen, than it does on the market, like Alferon. The company lost $3.9 million this time around versus $2.8 million during Q2 of last year.
And finally, Nephros Inc. (NEPH) is under the microscope again after Friday's high volume surge - though it was made on no company news. A third-party site issued a trading outlook on the stock that painted a rosy picture for NEPH shares. There's been no real company news since early July when we heard the FDA had approved the company's 510K request for its dual stage ultrafilters for use in hemodialysis procedures.
Nine times out of ten we'd look at a chart like this one and suggest locking in a decent profit before the inevitable pullback. In Nephros' case though, there's a chance more upside could be in store... there's a lot of support in place.
The consolidation zone between $1.05 and $1.50 is pretty clear; there's even a rising support line that was back in play with Friday's low. Ideally for the longs, either of those two support levels will hold up long enough to keep NEPH positioned to crack the ceiling at $1.50. That said, the longer the sideways/consolidation phase is, the better.
From a price/historical sales perspective, Nephros is still expensive; last year's revenue was 1.4 million versus a market cap of 55 million.
With its new dialysis filtration system approved though, the potential upside could vastly improve. Hopefully the company will offer some sort of scope of the revenue potential soon.... millions, tens of millions, or hundreds of millions? That may be what drives the stock's breakout from this consolidation zone.
It's definitely worth keeping an eye on for a potential breakout.
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