Cash in the pocket with SNUS

Sonus Pharmaceuticals (SNUS) is focused on the development of novel drugs that may offer improved administration, tolerability, safety and effectiveness for the treatment of cancer and related conditions. The Company's lead product candidate is TOCOSOL(R) Paclitaxel, an injectable, ready-to-use formulation of the widely prescribed anti-cancer drug paclitaxel. TOCOSOL Paclitaxel has been designed to overcome the limitations associated with Taxol(R) and generic paclitaxel-based chemotherapy, including time consuming and expensive preparation of the products prior to administration, long infusion times and undesirable or treatment-limiting side effects.

The latest news on this company indicate that it enhanced a private placement of equity at prices not far below the current market price (Sonus Pharmaceuticals Raises $17.8 Million in Private Placement of Common Stock), so institutions probably agree that this TOCOSOL drug has a good chance of getting to the final stage of being sold to the public.

Buy the rumor, sell the fact.

Technically we have one of the most reliable chart patterns, the double bottom, hence my title on this recommendation:



We have a perfect double bottom and a bullish breakout today with volume above average. The technical target of this breakout is a modest $6.67, but the stock may run a lot further.

Let's take a look at the short term chart:



The risk is that this was a false breakout, but given the white marubozu with this kind of volume certainly it doesn't look like it is fake. You don't know it until you bet, with real money, like I'm going to do tomorrow when I buy SNUS for the 3 Stocks on Fire Portfolio, 6.66% of capital as usual.

(This recommendation was made by David Randolph from 3 Stocks on Fire, and he will update this analysis everyday after the close until he sells the stock. The 3 Stocks on Fire Portfolio is up 148% since inception on 28th of April 2005. 3 Stocks on Fire is a Community of stock traders and investors. Our 3154 members exchange trading ideas and strategies on our message boards everyday. We welcome you as a new member of the 3 Stocks on Fire Community, please take 10 seconds to register and receive our free newsletter)