We have some desultory action this morning as market players wait for some news catalysts to create some movement. Breadth is running 2 to 1 negative. There are only about 50 stocks at 12-month highs as well as at 12-month lows which indicates there is no strong momentum in either direction.
I tend to think of markets as being either index-driven or stock-driven. This one is primarily index-driven but it is drifting around aimlessly while it looks for some sort of catalyst. Index driven action eventually will create some better stock picking but we are seeing neither right now.
I am watching for some stocks to track more carefully as we head into earnings but this price action doesn't do much for the charts right now. What will eventually develop is very hard to determine here so a watch list is a work in progress.
AIMT has developed a 'desensitivity' treatment for peanut allergies. It has been a long-time favorite of SharkInvesting.com but it has battled skeptics that have asserted that avoidance is a better approach to food allergies in children. Despite the criticism, the FDA's Allergenic Products Advisory Committee clearly supported the safety and efficacy of the product in mid-September, which paves the way for FDA approval, likely in January or earlier.
The stock pulled back following the good news but then popped higher last week when an analyst from Piper surveyed 45 allergists and speculated that there was 'massive upside' to AIMT sales. The sales numbers he projected were magnitudes higher than current projections. The analyst kept his Overweight rating and $60 target on the stock.
AIMT has consistently pulled back following good news, but with the FDA likely approval coming up quickly, we believe it is likely that dips are an opportunity that will be consistently bought by traders.
On Friday, a competitor, DBV Technologies (DBVT) , had its application for a competitive product, which is in the form of a patch, approved for review. The company still has a very long way to go and the data have not been nearly as competitive, so AIMT will likely become well established before DBVT becomes viable competition
Technically, the stock has support at its 200-day simple moving average around $22, and we'll be looking for additional entry points on weakness down to the 50-day at $21. As always, we would not chase the open on Monday but would look for entries on either weakness or strong momentum on increased volume.