Not so sure about taking profits today - Kat seems to come out with PR's at 7-10 in the morning from what I remember. I wouldn't want to take the chance of not making it back in.
Stocks are back in the black today, though it's still not clear if they have what it takes to finally move to new highs. A few charts, however, seem to be queuing up some nice trades no matter what the board market's got in store. Those names are Sunesis Pharmaceuticals, Inc. (NASDAQ:SNSS), KAT Exploration, Inc. (OTC:KATX), and MannKind Corporation (NASDAQ:MNKD). Here's a closer look at each.
Get ready for round two with KAT Exploration, Inc. (OTC:KATX). After a healthy pullback in late November and early December, it looks like the stock's gearing up for another bullish run.
Just a little history here - I actually went speculatively bullish on KAT Exploration on November 18th after the stock woke up from a long slumber. At the time I suspected it was a pumping effort, since there was no news at the time. In the meantime, it appears the public relations effort has gotten into high gear... tons of good news came out. Of course, KATX fell in the midst of all of it - buy the rumor, sell the news.
Now, however, we've seen the buying effort revived. KATX has made a string of higher lows and higher highs, and we're now in the middle of our second accumulation day since the dip. Better still, KAT Exploration volume tapered on the way down.
All in all, now that the volatility has been wiped away, I think the true underpinnings for KAT Exploration are bullish. As I said last time, just ride the ride as long as you can, but you'll also want to make quick exits at the first sign of trouble on the KATX chart.
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Just an FYI about Sunesis Pharmaceuticals, Inc. (NASDAQ:SNSS), if you were expecting a quick renewal of last week's strength - the stock's likely to move at least a little lower before moving higher again.
With today's move to a low of $1.46 for SNSS, the 38.2% Fibonacci retracement level of the entire December rally has been breached. The next likely stop is the 61.8% line at $1.10. I do think Sunesis Pharmaceuticals will at least get there; I'm not sure if it will find support there, however.
While I do recommend trading the breakout and breakdowns, I don't necessarily think Sunesis Pharmaceuticals is just another impending disaster that's going back to zero. See, the stock simply ran up too high, too quickly - now it's paying the price (welcome to irrational trading). The selling over the last three days, however, has been very light for SNSS. Bottom line? This may just end up being the 'step back' before the next 'two steps forward'. It will still be a step back though.
I'm almost a little hesitant to start this discussion for MannKind Corporation (NASDAQ:MNKD), as it's going to open a confusing can of worms. It's worth the risk though. So....
Pay attention prior peaks and bottoms with MannKind Corporation, as they're very likely to hint at future peaks and bottoms.... or breakout/breakdown levels. Many of them - more than I could show on the chart - are also major Fibonacci retracement lines for MNKD.
Resistance at $9.55 is the next big one; it's the 61.8% retracement of MannKind Corporation shares' move from the early-October peak and late-October bottom. What you can't see ('cause I didn't plot it) is that $9.55 is also the 38.2% retracement line from the 2006 peak to the 2009 low. (continued below)
See, when more than one key Fib line overlaps another one, the confluence of support or resistance is huge. In the case of MannKind Corporation that could mean the rally is halted there.... cold. Or, if it's broken, it could and should mean a major breakout move from MNKD, all the way up to $12.54 (which is another major resistance line, though not a Fibonacci line).
Bottom line? MNKD is very likely headed to $9.55 from here, If Mannkind reaches $9.55, then be ready to act on the next big move, since it should be a decisive/explosive one.
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