Emisphere Technologies, Inc. (EMIS.OB)

It is always a crap shoot when a trader trades pharma companies…..EVERY company has the next big drug, EVERY company is about to be swallowed up by Big Pharma for huge multiples, EVERY little pharma company is about to sign a out-licensing deal with Merck, Pfizer or other Big Pharma.  Unfortunately, most of those dreams never pan out.

Such is the case with Emisphere Technologies, Inc. (EMIS.OB). They have high hopes for their proprietary Eligen® Technology and are developing oral forms of injectable drugs or poorly absorbed compounds.

However, their “promise” appears to be wearing thin with investors.  I got a real kick reading the boards on this one.  It seems that management has been promising great things for too long with no results.

This stock is not about fundamentals, or potential or big news.  It’s about MOMENTUM.  EMIS has got it!

Take a look at the chart

Every meaningful indicator is pointing up…..how long the run will last is unknown.

• MACD is still below the zero line but has strong positive momentum
• Price has recovered from its 3-month low of $1.23 on 3-15-11
• Stochastics are increasing (but not overbought)
• RSI is doing the same
• On Balance Volume is recovering nicely

Momentum play, anyone?

EMIS suffers the disease of many small Pharma companies…..crappy balance sheet, no income and uncertain prospects.  They company has postponed the release of their 4th Q numbers so they can complete the audit.  I don’t know if I would stick around in the stock to find out how their last Q was.

Resistance is at $1.70, $1.80 and $1.95 with the 50 and 200-day MA’s at around $1.84.  Make sure you set your stops tight.

Here is what I am looking at for entry/exit points:

Last Close:              $1.59
Buy Opinion:          $1.55 – $1.65
Short Term Sell:   $1.95 (Watch and see if the MA’s will act as support on the way to $1.95)
Long Term Sell:     $2.50+

Good Luck and Great Trading,

Jeffrey Dean

Disclosure:  No positions

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