Sunday, January 10, 2010

Technical Reviews of SNSS, SOMX, and VVUS

VIVUS, Sunesis Pharmaceuticals, and Somaxon Pharmaceuticals are run through a charting wringer.

Stocks are hitting a wall again today, though it remains to be seen if the same underpinning will be in play near the end of the session. Either way, investors looking for good long idea continued to be better served by scouring the small and micro cap end of the spectrum. VIVUS, Inc. (NASDAQ:VVUS), Somaxon Pharmaceuticals, Inc. (NASDAQ:SOMX), and Sunesis Pharmaceuticals, Inc. (NASDAQ:SNSS) may be great starting points to that end; here's a technical look.

Though
Sunesis Pharmaceuticals, Inc. (NASDAQ:SNSS) isn't making any progress today following yesterday's rebound, we are now essentially certain of where the key lines in the sand are. That's good to know, since it will at least tell us when the next move has started.

Those lines in the sand for SNSS are $1.12 and $1.64. The lower level is pretty much where the stock found support late last month, and the upper level is where the stock stopped rallying yesterday (before today's tepidness). As it turns out -
- those levels also line up with Sunesis Pharmaceuticals' Fibonacci retracement lines.

There's not a lot we can do with that information just yet other than wait. Once Sunesis shares break above or below that range though, we should see a sustained move from SNSS in that direction.
How 'sustained'? It's hard to say... just put it on your radar for now.


Geez I wish I had been keeping closer tabs on VIVUS, Inc. (NASDAQ:VVUS) after my last look on December 15th. At the time I was bullish on the chart based on the way the wedge shape had been broken by a string upward thrust out of the formation. With today's big move higher from VVUS, I think the breakout's about on as firm a footing as we could hope.

The chart below says it all. Since the 15th, VVUS has managed to move from $9.36 to the current price of $9.87. That's not really a huge move for VIVUS, Inc. shares, but considering they had fallen back to the $9.30 last week, today's move higher is an important victory for the overall uptrend - I think this will convince other buyers the water is safe.

As for a target, I think VVUS is one of those stocks that could quietly make huge gains if given enough time, simply by following the guideposts established by its rising support line. For the time being though, let's just keep things reasonable and plan on VIVUS, Inc. reaching September's peak around $12.50. Once there, we can make a hold/sell decision.



I'm usually willing to bet on a gap being closed, though I have to admit that lately, it's been a little more hit and miss. That's why I was hesitant to even bring up
Somaxon Pharmaceuticals, Inc. (NASDAQ:SOMX). After noticing something else about the chart though, I think the odds of gains are working in favor of the bulls.

What's the added upside?As you can see on the chart below, SNSS made last month's reversal by pushing off a support line that - - wasn't clearly in play any longer. It's not a whole lot to build on for Somaxon Pharmaceuticals, but it's enough considering the decent increase in volume.

As for the 'how far' part, we have to assumed Somaxon Pharmaceuticals, Inc. shares are able to make another run for resistance at $4.75 or so. That line was also a ceiling in the latter part of 2008 (not shown) for SNSS.

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