What Biotech Climax?
Stocks can take years recovering from climax runs. That’s why I find so
impressive the recovery of some biotech shares. A handful of leaders are on the verge of breaking to new high ground.
Millenium Pharmaceuticals
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PowerRating) Thursday announced its acquisition of
the Cambridge Discovery Chemistry division of UK biotech company Oxford
Molecular Group. Boston-based Millennium is involved in development of genetics,
genomics and bioinformatics sciences to discover therapeutic and diagnostic
products. Reuters reported that Millenium is paying $65 million for the British
business, which provides technologies for discovery research including molecular
design.
The stock appears to be forming a five-month couple handle base, which began
following Millenium’s peak at 158 a share on Feb. 17. The resistance level to
beat is its June 21 peak of 145 7/16. Ideally, I’d like to see the stock cozy up
within three or four points of that pivot point. That way, the stock won’t
extend more than 4% before triggering a buy signal.
Here’s a possible candidate for the shorts. In an interview with
Reuters, Learnout & Hauspie Speech Products
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PowerRating) chief exec Gaston
Bastiaens said he was comfortable with analysts’ consensus estimates for 2000
and 2001. The interview follows a recent filing with the Securities and Exchange
Commission in which the Belgian speech technology company reported strong growth
in the Far East but warned that maintaining that pace could be hampered by
economic or political developments.
If that sounds foggy, ignore the verbiage and look at the chart. The stock
entered a resilient downtrend on March 14, punctuated by rally attempts that
consistently gave way to resistance along a rough downtrend line. The trip down
steepened the past two sessions. The bottom of Thursday’s trading range is a
possible pivot point.
