Looking for a reversal in ANDS
ANDS is a high flying stock that’s been in a nice uptrend since January 8th.
It sky-rocketed that day because it received Fast Track designation from the FDA for its drug approval, which is a great fundamental reason for it to go up, but consider that this company has had 0 revenue since 2008 to balance that out.
I agree that if this bio-tech company gains approval of its drug, it might start to see some significant revenue come in and that will be a good reason to go bullish on this stock.
I think that drug will pass the FDA approval process, but until it does this company will continue to eat through its cash.
Lets look at the technicals for a shorter term perspective.
This stock hasn’t seen many down days since the announcement of its FDA status, despite the market’s volatility.
A quick glance at a daily chart (http://stockcharts.com/h-sc/ui?s=ANDS) shows that this stock has an RSI @ 90, which is incredibly high and signals an overbought stock, and declining volume, which signals decreasing interest in the trend. Both of these are signs that a correction is coming.
As of Jan 30, many of the shorts had covered leading me to think that at least part of this rally had been a short squeeze.
I think that we should wait for a reversal to show itself before shorting this stock, and with rumors of a partnership in the works and an earnings release on the 26th, we can expect lots of volatility over the next little while so be wary of a false trend.
I have no doubt in my mind that there is to be a correction in the price of the stock. It might be after the earnings or it might be tomorrow.
Keep your eyes open. I most certianly will be.
