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Technical signals on recent breakouts in Biotech: QBIO, VVUS, UEEC

From Journal Transcript



Today, we are going to look at three stocks that have been showing increasingly aggressive traction on a technical level, with some strong fundamental catalysts helping to drive the action. All three demonstrate clear signs of accumulation with further upside potential.

Q BioMed Inc. (OTCMKTS:QBIO) shares have been on fire in recent action. One of the big drivers here is the narrative that we have a pending FDA approval for Strontium Chloride SR89, a radiopharmaceutical agent for the treatment of pain associated with metastatic bone cancer, through a lab in Texas that has already had plenty of such successes.

QBIO Technical Analysis: As a consequence, this low float stock is showing many signs of aggressive accumulation. The shift in behavior looks to be about the January Effect for investors, with money managers no longer having to worry about stigma or tax loss advantages. Once we got to January 1, the only thing to worry about is where you can make the most money going forward. And the stocks that have taken off since that moment generally represent what smart money sees as real value.

And now that we are potentially verging on a key FDA catalyst, money is flowing into QBIO. One key tell-tale signal is the recent rejection of lower lows inside of a very clear bullish flag pattern on the daily chart.

Money flows and RSI both confirm this sense of accumulation. The technicals here for QBIO represent a very strong breakout potential with headline drivers lined up to help that cause.

VIVUS, Inc. (NASDAQ:VVUS) bills itself as a biopharmaceutical company that develops and commercializes novel therapeutic products to address unmet medical needs in human health in the United States and the European Union.

The company offers Qsymia (phentermine-based drug, of “fen/phen” fame) for the treatment of obesity as an adjunct to a reduced-calorie diet and increased physical activity for chronic weight management in adult patients with an initial body mass index of 30 or greater, or obese patients, or 27 or greater, or overweight patients in the presence of at least one weight-related comorbidity, such as hypertension, type 2 diabetes mellitus or high cholesterol.

They just announced a positive cardio safety study on Qsymia, which could be a big catalyst.

VVUS Technical Analysis: That news has sparked a monster breakout move, taking the stock up through the major 50-day moving average on a huge swell of volume.

The RSI and money flows indices both confirm strong and aggressive breakout conditions on the chart. The next breakout trigger could be a move above the flat the 200-day MA.

United Health Products Inc (OTCMKTS:UEEC) makes hemostatic gauze products that potentially represent a revolutionary solution for surgical uses. The company offers HemoStyp hemostatic gauze products to absorb exudate/drainage from superficial wounds; and control bleeding. Its products include dental gauze products for oral surgery, trauma gauze products for battlefield trauma, and island dressings to support intravenous procedures.

UEEC Technical Analysis: Shares of the stock have been on a rip in 2019, breaking sharply above the stock’s long-term moving averages, with the 50-day MA now trailing and rising. The move since late December has added as much as 70% to market cap. While RSI has reached on overbought level above 90, it has since receded back under 80 without much downside, which is a potentially encouraging sign.

The $1/share level remains critical resistance, but could also represent an important breakout trigger level if exceeded on strong volume and with initial closing follow-through. The overall picture suggests aggressive accumulation ahead of potential news catalysts including M&A and FDA rumors flying around for the company.

Trade Green,

JT Team

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