$OPTR Maintaining a Steady Upward Trend into FDA Decision
Written by Bill Rusnak. With Optimer Pharmaceuticals, Inc. (NASDAQ:OPTR) set to receive news from the FDA on the 30th about the use of DIFICID (fidaxomicin), it is worth taking a look at the technical status of the stock. In February, Mark and I were both bullish on this stock, despite our different analyses. Check that article out here. For a couple of weeks, the stock teetered within a range between 11.50 and 12.50. At the very end of March, the stock was at the lowest of its range and immediately bounced off 12.00, gapping up to new highs the next day. Since then, OPTR has cooled to retest its new trend line and has once again made new highs.
That was where OPTR has been, now it is time discuss where it is and where it could be going. As mentioned in a recent article, the general opinion is that DIFICID has a very likely possibility for being approved. (Article and options strategy here). Initially, the last leg within the current trend has been accompanied by slightly lower momentum than what was seen at the beginning of April, but that is obvious even without looking at a MACD oscillator (gap up explosions tend to be blatant indicators of strong momentum). In addition, OPTR is back to a resistance area, as can be seen on the weekly chart below. Above that, 15.00 is the next logical target, which would likely be broken upon approval. If one were to imagine the current channel extending itself (upper end is the pink line above), s/he could estimate OPTR’s upward target to be about 15.50-16.00 (which is close to calculated price in the aforementioned article).
Below the current price, the chart as been overwhelmed by an onslaught of levels created by the turbulence between 10.00 and 15.00 over the past two years. The big areas that stand out are 8.00 and just below 6.00. Look for OPTR to head to those levels if the company is slapped with a CRL. As always, it would be wise to assess your risk/reward at such high prices, regardless of what the FDA’s decision may be.
On a lighter note: After a discussion with an MD/MBA candidate from my medical school, who revealed he was a BioRunUp subscriber, I felt obliged to do a write up on this particular stock, which had come up during our conversation. Apparently BioRunUp is getting very popular!
Disclosure: No Positions
Bill Rusnak is a medical student, as well as an experienced trader in the futures, foreign exchange (forex), and stock markets. He primary focuses on the technical aspect of trading, finding buy and sell opportunities during promising moments within a stock’s (or any other instrument’s) current trend. His strategy is based upon Wyckoff principles and momentum indicators. Follow him on Twitter (wjrusnak), to keep up with his articles about biotech stocks and get updates about his performance in the futures and forex markets.