after close: ROBERT PEDONE of 'the street' says, 'break out in AFFY very possible, "way oversold."
One stock that’s trending within range of triggering a near-term breakout trade is Affymax (AFFY), a biopharmaceutical company committed to developing novel drugs to improve the treatment of serious and often life-threatening conditions. This stock has been destroyed by the sellers so far in 2013, with shares off by a whopping 85%.
Shares of AFFY were pounded lower by 85% on Monday after reports of severe allergic reactions in some kidney-disease patients, culminating in at least five deaths, prompted the firm to recall its flagship antianemia drug Omontys.
4 Stocks Under $10 Moving Higher
If you take a look at the chart for Affymax, you’ll see that this stock gapped down huge on Monday with massive downside volume, from over $16 to its recent low of $2.34 a share. Following that gap down in price, shares of AFFY have rebounded slightly to its recent high of $2.82 a share. This stock has now entered extremely oversold territory, since its current relative strength index reading is 11.33. Oversold can always get more oversold, but it’s also an area where a stock can experience a powerful bounce higher from.
Traders should now look for long-biased trades in AFFY if it manages to break out above some near-term overhead resistance at $2.82 a share high volume. Look for a sustained move or close above $2.82 a share with volume that hits near or above its three-month average action of 2.41 million shares. If that breakout triggers soon, then I expect to see a very large tradable bounce that could easily spike shares of AFFY by 30% to 40%.
Traders can look to buy AFFY off any weakness to anticipate that breakout and simply use a stop that sits just below $2.34 a share. One could also buy off strength once AFFY takes out $2.82 a share with volume and then simply use a stop that that’s a reasonable percentage from your entry.
Caution Zacks just re-released old news from this weeks of the recall to make it look new trying to scare investors out..
Oh yeah. Do listen to what Wall Street advises. Remember the Wall Street analysts who, after reading the Fresenius letter, reiterated their buy recommendations and $30 plus share price targets, characterized the Fresenius letter "a non-event", "business as usual" and even "good news" since a Fresenius contract will come sooner than expected. They dismissed the precipitous fall in the share price from $17 to less than $12 as a "knee jerk reaction" that justified the share price recovery just before the drop from $16.50 to $2.20. They are now using paid bashers on this board, IMHO such as court full, to help unload the remaining shares held by Wall Steet institutions and cronies on unsuspecting retail investors.