AXYX

[David Randolph]

Axonyx Inc. (AXYX). The Group's principal activities are to discover, develop and acquire pharmaceutical compounds for the treatment of memory and cognitive disorders. The Group identifies and acquires novel post-discovery central nervous system drug candidates. It acquires the patent rights to these candidates and advances the compounds through clinical development towards regulatory approval. The Group has acquired worldwide exclusive patent rights to three main classes of therapeutic compounds designed for the treatment of Alzheimer's Disease, Mild Cognitive Impairment and related diseases.

Here's the all history chart for AXYX:



On May 19th the new director of the company bought 250,000 shares. On March 31 the company had $75,941,000 in cash, but the market cap is just $74,046,762 (read link: Axonyx Inc. Announces First Quarter 2005 Financial Results).

Considering the short term chart:



We see that volume has been high over the last few days and on Friday's session we've had an explosion in volume. The risk on this trade is low, since there won't be a technical motive to keep the stock if it breaks $1.32 on close again.

AXYX is a stock on fire for tomorrow's session.

Everyday I will analyze AXYX after the market close until I sell the stock. I always tell I'm going to sell before I actually take action. You just have to follow the answers to this post.

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[seadog]

Excellent pick. Should be worth a shot.

[Tirebldr]

So then, you who know, think this might be a stock which would eventually fill that gap? Or is there not that kind of a strength potential? What would be your target?

[Irishman]

FYI-
It should be noted that AXYX was added to the Russell 2000 Index on Friday, thus the huge increase in volume. A number of mutual funds rebalance their portfolios according to additions and subtractions to that index.

[AussieTrader]

Well noted Irishman,

When stocks get added to the Russell the process can cause havoc to a chart in terms of price spike / volume spike. The funds also tend to do their buys right at the close and this is exactly what happened to AXYX 1.2M shares traded at 4:00pm, another 1.2M near to 6:00pm. 2.5M out of 3.4M daily total as a result of the funds adding.
Good news is that by now being in the Russell AXYX will gain a lot more notice and now has the 'support' of these funds who have 'bought' in in the mid $1.30s.
As David's chart shows the long term has AXYX with a bottom around the $1 level.
Note the funds do not buy AXYX because they like the company, but because the market cap and other financial calcs mean it 'has' to be added to the index and their rules dictate they must buy stocks in that index.
Risk reward to me looks good, bottom is close by upside is higher...simple.
Mike

[freimuch]

the reason why the funds buy right at the close is to mimic the price when it goes in. similar to a stock going in to the s&p.they wouldnt want to buy during the day then watch the price decline. anyways pertaining to AXYX  been trading the stock for a couple years now very hard stock to trade so it would be nice to get in at the basement and ultimately ride the elevator or lift for you europeans.but once it does move we could see the five or sixes in a month  good luck to everyone

[stockpicker]

I am not sure if AXYX is a great fundamental play. I would like to quote their recent PR:

"... Results from the first Phenserine Phase III clinical trial, announced on February 7, 2005, showed consistent and positive trends on all primary and secondary domains in the symptomatic management of AD and a safety profile in optimal range for marketability. Current data indicate no statistically significant differences between the efficacy of the active and placebo groups were observed in areas of cognition, global function, behavior, and activities of daily living. After analyzing the data, the Company has concluded that it will investigate the reformulation of Phenserine to a sustained or extended release formulation rather than the immediate release formulation used in the recently completed trials. The reformulation should reduce the pharmacokinetic peak experienced with the immediate release formulation and enable more drug to work longer over the dosing interval in the patients. As a result, Axonyx announced it had halted additional patient recruitment to its second and third Phase III clinical trials that were commenced in June 2004 and September 2004 respectively. Those patients already enrolled in the trial will receive 12 weeks of treatment..."

This is the reason for the "gap", and only positive fundamental data will help to fill this gap. The company managed to raise a lot of cash, so a PIPE is not needed in the next 2 years or so, but with a quarterly cash burn rate of $6-7MM, one has to be careful in the analysis of "buying less then cash". I couldn't find any "goodies" in the company's pipeline, so you guys are betting on a short term technical play, but I am afraid that there is nothing more but a mere short term T/A hope here.

FWIW

[David Randolph]

Bought at the open @ $1.40. Of course, the updated chart and analysis will come only after the close. The chart is already on the recommendation text above.

[netman]

Stocky,
We are here to buy the stock for short term play.

[stocky]

Very correct

[stocky]

I had owned AXYX in the past and sold it for profit before it took big plung. Goodluck for those who own it now. They have plump cash in bank.

[David Randolph]

Thanks for your replies to AXYX's posts, very interesting. Surprisingly the volume was strong again today and we had a beautiful white marubozu.

The way is clear for $2 a share, perhaps in the next few days. I believe the stock overeacted to the news that stockpicker mentioned and will enter the gap zone at $2.04-$4.63.

The company has more cash in the bank than its market cap (well, not anymore  ), I don't see much risk at these levels ...

[David Randolph]

Damn AXYX, black marubozu more than offsetting the previous day's advance. I don't mind selling at a small loss or at a big profit, but it's hard to sell with a small profit, since the strategy is to «cut the losses and let the profits run».

Of course, sometimes we can clearly see there's no more profit to be made on a particular trade and it is wise to take 5 or 3 or even 1% profit. I think this wasn't the case with AXYX. Everything was in place for the stock to advance, but it didn't.

What am I left with? The initial trading plan, which is to hold as long as the stock closes above $1.32 and expect an advance to above $2 to sell with a profit.

[stockpicker]

... back to fundamentals ...

do you guys really think that a 16-man company based in Manhattan (7th avenue - according to Yahoo) can be a succesfull biotech company? I mean, it can, but not when a CEO takes home over $500,000/year, I would look for someone more hungry...

In order to be traded above cash, a company has to show real value - not sure that it can be found in AXYX.

I would take the little profit and run (but heck, I know barely nothing about TA)

[David Randolph]

AXYX spoke for anyone who was willing to listen: $1.32 is a support and the decision point for this stock. That's where bulls and bears are meant to fight. The short term trend is higher, but the stock is facing a meltdown from the highs ... however, the past is of little value I guess, the high values the stock traded in the past have nothing to do with the future.

I disagree a little with stockpicker when he says that for a company to trade above cash it must have some value ... I see many companies trading much below cash, in risk of not meeting it's short term obligations, and yet with higher expectations and «value» than AXYX.

Trading above cash we know the company will be here, from his words, for 2 more years, at least. In these 2 years many things may happen on the positive side. I still think the stock overreacted with that 60% gap down and it should correct somewhat to values above $2 a share.

I keep the trading plan: sell with a profit a bit above $2. Sell with a small loss if we get a close below $1.32 (because that would show the stock doesn't want to go up in the short term, and money must be allocated where there's short term potential).