|Technically speaking, still an easy trade to jump into|
|Thursday, 11 November 2010 06:04|
Shares of Aastrom Biosciences, Inc. (NASDAQ:ASTM) closed the day trading at $3.67 after several consecutive days of strong climbs took the stock to highs of $4.04 on a total traded volume 4.5M.
Candletsick analysis now shows that a "High Wave" was formed- indicating a lost of sense of direction and a fair amount of indecision in the market. Healthy profit taking by investors saw shares drop as low as $3.50 during Wednesday’s trading session, but the bulls battled right back taking shares back up as high as $3.75 during the second half of the day.
Critical limb ischemia (CLI) is typically identified as the end stage of peripheral arterial disease. People with CLI face a high risk of amputation and in some cases death. The disease results in more than 160,000 amputations each year. Patients in the RESTORE-CLI study were treated with vascular repair cells (VRCs). These are autologous bone marrow-derived cells that are expanded using Aastrom's proprietary technology. Once expanded, they are administered to patients in treatment.
Previous interim analysis results showed positive trends in favor of the VRC treatment group in terms of the most clinically meaningful endpoints, i.e., amputation rates and wound healing. These trends were consistent over time and the effect was sustained over the entire observation period.
The previous interim results together with other relevant research, indicate that a mixture of cell types from the patient's bone marrow can improve circulation in the affected limb in patients with CLI. VRCs contain a very large number of stem and progenitor cells that have been implicated in improving blood flow and in removing scar tissue that may create a barrier for key nutrients to reach the tissues in the limb. Aastrom's RESTORE-CLI trial is the largest double-blind, randomized cell therapy study currently being conducted for CLI.
"This is an exciting time for Aastrom. We have made significant progress in our late-stage clinical development programs. We received Fast Track designation, and submitted documents in support of a special protocol assessment (SPA) for our Phase 3 CLI program. We also established a new partnership with ATEK Medical that will enable us to grow and further advance our cell cassette manufacturing capabilities. Finally, we strengthened our management team and Board with industry veterans who will provide important counsel as we move forward," said Tim Mayleben, president and CEO of the company recently.
From a technical analysis standpoint, the shares' EMA, MACD and Stochastics indicators are all very bullish. Strong support for the stock is priced at $3.33 and given that shares are trading at new highs, there is only some very minor resistance at $4.04. Given the relatively low number of shares and float, if the stock re-tests and breaks past that $4 mark, the stock could run nicely beyond $5 prior to next week’s presentation and even higher if the news is as positive as some industry observers believe it will be. The market cap for the company stands at only $104M.
Prior to Wednesday’s session, the stock’s RSI was in overbought territory, but has now pulled back a bit into power territory. A look at the short interest levels shows them at thier lowest points during the past 52-weeks as traders and analysts believe that shares will continue to rise given that Aastrom’s near phase III treatment for CLI has a market leading position and shows clear blockbuster potential.
Disclosure: Long ASTM