Vixtory for Volatility

Written by GSCR Staff   
Thursday, 27 August 2015 07:54

The sky is falling!  Nothing could be further from the truth.  Even with the blood bath that was Monday’s stock market, some of our previous Market Monitor, and 30-30 picks were big winners that day and bucked the trend.  These included Cypress Energy Partners, L.P. (NYSE- CELP), BioTelemetry, Inc. (NASDAQ – BEAT) and Hudson Technologies, Inc. (NASDAQ – HDSN), all up over 3% for the day.

What’s the point here?  The chart below illustrates the discussion.  The VIX has been slowly going hum ho well above 20% for the most part over the last few months.  This past week has ushered in a traders market.

CBOE VIX Index 1-month
(Source: www.google.com/finance)

Picking some short term gainers for the satellite portion of your portfolio could help you endure a general market correction for your longer term plays over the next few weeks while this ‘China syndrome’ settles out.

We found a small cap in our go to sector, biotech.  Nektar Therapeutics (NASDAQ – NKTR - $9.83) is a solid volatility candidate at 6.3% over the last month.  Additionally, the six month chart below illustrates that we may have reached another bottom.

NKTR 6-month Chart
(Source: www.otcmarkets.com)

Nektar Therapeutics, a biopharmaceutical company, develops drug candidates that utilize its PEGylation and polymer conjugate technology platforms in the United States.  Its product pipeline includes drug candidates in therapeutic areas comprising oncology, pain, anti-infectives, and immunology. The Company offers MOVANTIK, an oral peripherally-acting mu-opioid antagonist for the treatment of opioid-induced constipation in adult patients with chronic non-cancer pain, and who have an inadequate response to laxatives.  Its drug candidates in clinical development stage comprises BAX 855 that is in Phase III clinical trial for treating Hemophilia A; BAY41-6551, which is in Phase III clinical trial to treat gram-negative pneumonias; NKTR-181 that is in Phase III clinical trial for chronic pain; NKTR-171, which is in Phase I clinical trial to treat neuropathic pain; and NKTR-214 that is in research and preclinical trial stage to treat oncology, as well as MOVANTIK, which is research and preclinical stage for treating chronic pain without constipation.  The Company’s drug candidates in clinical development stage also include etirinotecan pegol, a topoisomerase I inhibitor that is in Phase III clinical trial for metastatic breast cancer, as well as has completed Phase II clinical trial stage for platinum-resistant/refractory ovarian cancer and second-line metastatic colorectal cancer; and in combination with 5-fluorouracil/leucovorin to treat gastrointestinal-related solid tumors, which has completed Phase I clinical trial.  Nektar Therapeutics has collaboration with Baxter Healthcare; Bayer Healthcare LLC; and AstraZeneca AB.  In addition, it has license, manufacturing, and supply agreements with Amgen Inc.; Allergan, Inc.; Halozyme Therapeutics, Inc.; Merck & Co., Inc.; Ophthotech Corporation; Pfizer, Inc.; F. Hoffmann-La Roche Ltd (Roche); and UCB Pharma.

One indicator we have been pointing recently is EPS, and a firm’s ability to meet or exceed expectations.  Even though the numbers are in the red, Nektar has beaten the EPS over four straight quarters.  Additionally, back to the technical side, the average volume of trading over the last three months is 1.6 million per day, a solid metric for momentum.

We like NKTR on a predominately technical play as big money looks for a short term trade.  We think the stock can climb to $12 by mid October.

Have a great day!

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