Reader: Could you share your thoughts on Aradigm (OTC:ARDM) and Adventrx (AMEX:ANX)?
Both look as significantly undervaluated biotech companies with several catalysts comming near term. In the case of ARDM there is a significant milestone comming in January and ANX is preparing their first NDA with a speed "reformulation" track. ANX rallying right now, so would you wait till there is some pullback?
Vinny Cassano: I've commented on both of these stocks in the past and I continue to believe that both are decent long term speculative plays - with short potential to sell into any spikes in order to end up on house money for the long term.
Adventrx especially has started to receive some hype of late, and a pullback is possible after the hype dies down, but since there is the possibility that news could be released in short time that would push the stock higher, I see nothing wrong with starting to buy a position in the stock now, but holding some cash on the sidelines to add shares if it drops; this way, you don't miss out on the run but can still take advantage and average down on a decline.
Aradigm has become more attractive as an accumulation play with the recent drop that has the stock trading at thirteen cents, and any decent update news could make for a quick double in price.
Peter Depalma: As a trader, I'm not playing Aradigm now- at least not just yet. I did play ANX last week, but I secured my profits during Friday's session because it's due for a pullback and it could happen on Monday. At least that's what the chart tells me.
Last time we saw a candle that looked that way on this stock, there was a bit of a pull back the following session. The stock rose all the way to $.22 on Friday and then the bears took over, ending in complete indecision between the bears and the bulls by the end of the day.
My bet is that you and I will have a chance to buy in cheaper this week when it pulls back. That's exactly how this stock has been acting so far. It rallies and pushes for a couple of days, volume starts to dry up and and it pulls back. Then everyone see's cheap shares, jumps on and up we go again. I'm waiting today's session out. Especially since most traders go away for the holidays, regardless of upcoming news items and milestones.
If you're in it, watch the action carefully.
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