Dec 2, 2011 Small Cap Stock Picks
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As any avid trader knows, December is a huge month for small cap stock picks as we see many end of the year rallies with these stocks pushing 20-100% in a very short amount of time. We’ve already seen $PEIX, $BIOF, $URRE and $DEXO all rally 50-100% after i called them out just weeks ago. As you can see here in this video analysis of URRE and DEXO HERE prior to the huge runs that they made. Or How about this analysis of PEIX and BIOF right before they doubled in this post HERE?
I can call these kinds of moves because of two things. News speculation and the Chart patterns. News is very important, but so is the pattern. When you get FOUS4 patterns and news strung together this is where it can create the perfect storm and you see the very fast 20-100% movers. A FOUS4 pattern is 1 of 4 different patterns that i have coined and mastered over the past 6 years and you can learn all about it in the 7.5 hour Training DVD i offer. Did i mention its the #1 Rated DVD @investimonials.com? Or How about the fact that its selling for 50% off all month long HERE?
The reason why i bring up these past plays is that because these patterns, and history itself, tend to be repetitive . And i have two more in the pipeline that are awaiting to see their 20-100% gains in the not so distant future.
First up is Cyclacel Pharmaceuticals which trades on the Nasdaq under the ticker CYCC. This stock recently hit rock bottom as it plummeted to just below .40 .. Things were looking bleak as long time investors were dumping shares on CYCC which probably had a lot to do with its continued downtrend. Quoted from the street.com here.
“CYCC lost one of its largest, long-time shareholders. Austin Marxe and David Greenhouse, also known as Special Situations Fund, sold 3.95 million shares in the quarter to eliminate its stake in the company entirely. Stepping in with new buys were Ayer Capital (1.31 million shares) and RedMile Group (1.15 million shares.)”
But just as CYCC was bottoming out the Bedford report issued a PR on CYCC which gave way to some momentum and when i actually first blogged CYCC in my video analysis as one of my favorite stocks on the 20th as you can see in this video HERE . Now that the big fund had dumped all there shares in the open market guess whoes attention this also grabbed. Cyclacel CEO Spiro Rombotis and CFO Paul Mcbarron just started buying in shares right as Austin Marxe and David Green House dumped there last shares of the fund in the 50 cent area as you can see here via insidercow.com.
Now that all the major selling pressure is gone The CEO and CFO both saw an opportunity to get back into their company at a dirt cheap price. And i completely agree with them. Barring any bad news about trials CYCC has plenty of upside potential and i think could be trading back above $1 in the not so distant future. You can watch a good interview from a few days ago about CYCC’s leading drug in their pipeline. It has reached its final stage before FDA approval. Speculation alone will drive this stock up. Video Interview HERE . CYCC is also going to webcast an investor meeting next wednesday on December 7th seen HERE
So thats the story behind CYCC currently.. But i also said that the Chart is very important, and it most certainly is! CYCC just broke a near perfect looking FOUS4 revival pattern is this broke the neckline resistance around .67-68 today on increasing volume. I longed this position today @ .66 just as it was breaking out. The technical target for this breakout is first near $1 as this is always a very strong area of support/resistance. But just like DEXO, PEIX, URRE, and BIOF. When that $1 breaks this stock can easily run much higher from that level and CYCC could certainly do that as well. With the recent Insider buys, speculative nature of their leading drug in its final stages before the FDA, plus a FOUS4 pattern breakout today. I think this is a perfect storm for a near term huge appreciation in price for CYCC.
Next up is none other that Adeona Pharmaceuticals which trades under the ticker $AEN . Its been about 10 months since AEN has seen any real action like when in doubled in a few weeks in march of this year. Or how about when it doubled In December 2010 a few months prior. Or how about when it nearly tripled in march of 2010, and also doubled December 2009. You see what im getting at? You know that whole history repeating itself thing i was talking about earlier? And how about that mention that small caps go on manic rallies in December for some reason. Well it is indeed that time of the year again and AEN appears to be forming up the same pattern that it has formed the last 2 years in a row. Third time is a charm right?
Lets take a peak @ the 3 year AEN Stock Chart:
The pattern that AEN is in is what I like to call the FOUS4 Gold pattern. A gold pattern is when a stock trades below $1/share for a period of 6-12ish months. During this time the stock may bounce off the $1 resistance area from multiple times creating a firm resistance near that golden $1 area. Thus if an when that resistance breaks this causes a huge amount of buying pressure up to the next major resistance area, Of which is the next whole #.. $2. Usually some kind of news sparks up some hype in the stock and it heads towards $1/share. Its basically essential that you have news. You need some hype and speculative nature to the stock to send to $1 and be able to break that golden $1 area.
AEN just had three speculative PR’s in the past week that have sent this stock flying back towards that golden $1 area. First of which sparked this latest rally , AEN has partnered with the Skirball Foundation to battle MS to begin phase II clinical trials of its drug Trimesta @ UCLA.
Then on the 23rd AEN announced another collaboration with Intrexon for a DNA based therapay. PR HERE
Then just on the 30th of November AEN reported positive results for Oral Zinc therapy in ALS… aka Lou Gehrig’s disease. PR HERE
So we have a slew of good news coming in on the wire that has sent AEN upwards near $1/share. Strong resistance remains in this area but if this pattern consolidates and we breakout to new highs this stock could potentially rip near $2/share like it has done the past two Decembers in a row.
Heres an illustration of a gold Pattern pulled from a slide in the FOUS4 DVD
Looking @ the shorter term chart of AEM we can see the short term 3 phase triangle forming near a buck as i illustrate in the Gold Pattern.
We’ve seen AEN do it before. Theres no reason why we shouldn’t speculate that this couldn’t happen again. We have the perfect and exact set up as the last two prior december’s. And 3 recent speculative PR’s which gave rise to a surge in volume and price appreciation. Im long AEN in anticipation of this potentially breaking out of this $1 area.