Oncothyreon Inc. must break above resistance at $9.00 to become a buy

Feb 24th, 2012 – Comment

If ONTY moves through $9.00 with conviction and resistance becomes support that is when you want to catch this ride.


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Good Evening Lou,

I wonder if you can provide some insights on ONTY (Nasdaq), in particular the technical analysis.

 

 

Nash

 

 

 

Hey Nash,

 

Thanks for the assignment. Oncothyreon Inc. (ONTY NASDAQ) is a biotechnology company working on immunotherapy treatments for various  forms of cancer. Their lead product is Stimuvax which is in Phase III trials with partner Merck KGaA. When examining the case for a biotech or pharmaceutical company with molecules or treatments in clinical trials its important to have some idea of when the trials are expected to conclude. The website http://clinicaltrials.gov/ will provide answers to some of your questions on this and other clinical trials. The Phase III trials for Stimuvax are expected to reach their primary completion date in September of 2015. In just over three and half years or sooner there will be a go, or no go, decision made on the company’s most advanced opportunity.

A check up on the condition of the charts will provide some insight as to how best to proceed.

 

 

 

The three-year chart illustrates the support that the stock has bounced off of at $6.00 and the resistance it has met at $9.00. The $9.00 level has proven a hurdle that ONTY has not been able to clear going back to late 2005.  If it can move through the barrier with conviction there is little resistance to $15.00.

 

 

 

 

 

The MACD on the six- month chart has generated a number of accurate buy and sell signals. Currently the MACD is not providing much information as to direction. At this point without a clear signal as how best to proceed I would not be a buyer. If ONTY moves through $9.00 with conviction and resistance becomes support that is when you want to catch this ride. Another thing to keep in mind when hunting biotech companies that don’t have an approved product in the market, and spend most of their cash on beaker geeks working in labs, is that you want to be aware of when their executives will be presenting at conferences. Often times those events are when developments are announced and in the absence of revenue and sales its the press releases that get investors hitting the buy button.

 

Make it a profitable day and happy capitalism!

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