With just a quick glance, Aastrom Biosciences Inc. (NASDAQ:ASTM) doesn't look like any less of a disaster today than it did a week ago, a month ago, or even a year ago. But, the longer you look at ASTM, the more it seems it may have already hit its ultimate bottom, and is now biding its time to start the rebound.
There's actually a lot of things going on with ASTM here, and all of them matter. But, first things first. Aastrom Biosciences is the biotechnology company developing a stem cell therapy specifically aimed at cardiovascular disease. The reason shares have tanked since early 2011 through last month - a selloff from a peak of more than $60 to a low of $3.16 - of course, is disappointing progress on the drug development front. And truth be told, the company probably deserved to see its stock sell off the way it did. The R&D effort could not only never live up to the hype surrounding the company's stem cell research from yesteryear, and once the results of its work failed to live up to lowered expectations, the market started to proverbially throw the whole thing in the trash pile.
Nothing is forever, however, and too much of anything is too much.
While the progress Aastrom Biosciences Inc. has made on the cardiovascular stem cell treatment front has been slow and disappointing at times, it was still progress, and there's still something of value in the works. It's just that the market chose to see the glass as half empty rather than half full.... ok, the market chose to see the glass as three-fourths empty rather than one-quarter full, but you get the idea - there's something of value here. And, more than that, it looks like traders are finally seeing that possibility, giving ASTM shares just enough support to offer a glimmer of hope.
This where a close look at a chart and a trading microscope come into play.
Technically speaking, the only remarkable feat ASTM shares have accomplished of late is a cross above the 20-day moving average line (blue), but even that's a dubious honor. After all, the 20-day line is still basically in a downtrend, and we've seen Aastrom Biosciences shares move above the 20-day moving average line before to no avail.
There's something different this time, however. This time - and this is just within the last two trading days (counting today) - there's a legitimate and sustainable effort from ASTM to put some pressure on and eventually punch through the 50-day moving average line (purple). Take a look.
Simple, to the point of being annoyingly simplistic. Admittedly, yes, but sometimes the simple, subtle clues end up being the most potent ones. This is the most (real) buying interest we've seen in Aastrom in months, and may well suggest the tide has turned for the better.
If you need another layer of evidence, notice that since August, we've seen three waves of major accumulation (high buying volume).... the most volume we've seen in favor of Aastrom Biosciences Inc. in over a year. The clincher will be a close above the 50-day moving average line (currently at $4.31). There's no guarantee it'll happen, but if it does, it could be a huge catalyst... and there's a ton of room to rebound here. It's definitely worth the wait, and worth putting on your watchlist.
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