Sunday, September 01, 2013

Best Biotechnology Stocks: Alkermes ($ALKS)

My fundamental view on Alkermes is currently available on the Motley Fool.

The stock spent most of 2011 and 2012 contained by $20 resistance as the S&P posted new swing highs, it was only in the latter part of 2012 that Alkermes was able to hold a break of $20. Since meeting the measured move target of $26.50 the stock has followed with a new consolidation phase.


The current advance is tightening into a bearish wedge with key weekly support at $30.  The latter will be an opportunity for a long position in the coming week. However, the daily chart shows potential for a move to $27-28 as part of a gap close from April - potential buyers may be best to wait until then.  Momentum buyers would need a volume break of $35 to get excited as the stock has traded sideways since April's earnings; playing the momentum side offers a measured move upside target of $42.30.  Again, those getting in at $27 or $30 could hold for this on a push above $35. Stops should be considered on a loss of $25.50


Technicals are a bit 'meh'.  On-Balance-Volume is on a 'buy' signal, although the MACD trigger line is on a clear 'sell' trigger and is about to break the zero line; an effective bearish confirmation. Stochastics and ADX (+DI/-DI) are neutral with a slight bearish bias. Bears "win" the technical argument, although this could quickly change given their positioning.

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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com.
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