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Is The Rebound For Real?

Posted by Posted by VFC on Oct 05, 2011

The fourth quarter opened up this week with the same thud heard during the closing days of the third, but after a quick slam on Tuesday morning that saw the DOW drop another two hundred points, a turnaround played out and the markets actually closed well in the green.

The reversal of fortune - quite literally - could have been related to remarks made by Federal Reserve Chairman Ben Bernanke who intimated that there are still some tricks left in his repertoire to stimulate the economy, or it could simply be that sentiment isn't quite as bad as the media hounds make it seem.

Another possibility is that all the funds and big players are stepping their short investments down this time, rather than crashing everything all at once as per 2008, to keep the new watch dogs installed by the Obama regime off their backs.

It's likely that we haven't seen the last of this year's stock-sliding ways, but regardless of the reason for Tuesday's turnaround, here's a few key stocks we're watching that enjoyed some green after all the bleeding days:

DNDN: Dendreon closed the day on Tuesday to the north side of nine bucks, up over eleven percent after dropping sharply into the piss-poor market as concerns about its ability to sell Provenge as expected rates dominate shareholder speculation.

After hours trading saw shares dropping again, but market speculation has it that Dendreon might not stay down for long. Some are even guessing that Provenge numbers come in ahead of expectations for the most recently-completed quarter, although those expectations are revised from the original estimates by the company after it was identified earlier this year that Doctors were hesitant to front the money for the expensive treatment in fear of not receiving a timely reimbursement.

Here's one - of many - that looks to be worth buying on the dips. I like it.

SIGA: Siga hasn't caught much of a break this year, even with the awarding of a large government contract. The outcome of the PharmAthene lawsuit had sent shares spiraling to below the three dollar mark last month, and SIGA hit those prices again early Tuesday, but after a near-twenty-percent price increase during late day trading, SIGA is sitting close to $3.50.

Again, it's likely the volatility is not done, but each time this one dips to below three, it looks good for a short term trade and a long term hold, in my opinion.

I don't want to bring out kharma onto the SIGA shareholders, but the worst should be behind this company.

HGSI: Well beaten down, even after announcing encouraging sales numbers for the newly-approved lupus drug Benlysta, shares of Human Genome were up by over four percent on Tuesday as the market enjoyed a late-day turnaround.

The analysts have this one returning back to the twenty dollar level, and the news from Britain last week about Benlysta not being covered by nationalized medicine might just be a bump in the road, and not worthy of the fear that the shorts tried to put in the retail investor after that news was announced.

While others out there - like Avanir (AVNR) - are seeing their drug launches look pretty weak in a down market, Benlysta is fairing pretty well, and a continued positive trend might ward off any short attack.

Others would agree, if Tuesday's action is an indicator.

Disclosure: Long SIGA, DNDN, HGSI.

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