AVN ready to come back to $10

AVANIR Pharmaceuticals (AVN). The Group's principal activities consist of research, development, commercialization, licensing and sales of innovative drug products and antibody generation services.

Let's take a look at a long term chart for AVN:

The stock has been up and down, between 1 and $10 for the past 15 years. The stock is trending higher now and it seems to be starting to climb the mountain again.

For the short term there's an important barrier at $3:

We have all the caracteristics of a double bottom - but we still don't have confirmation. A close above $3 would confirm the bullish case and $3.9 would be the next target (it is the technical target of the double bottom).

Volume was huge yesterday and AVN rose 9% in a down market. Relative strenght is a signal demand is outpacing supply. We buy at the open and expect a close higher than $3.

Trading Plan:

1) Buy at the open
2) Sell with a loss if close<$2.46
3) Keep monitoring the stock to sell with a profit - if we get a close above $3 expect $3.9 to come rapidly.

David Randolph
www.3stocksonfire.org