DVAX Dynavax Technologies possible large Cup and Handle

DVAX20090803

Biotech stocks can be very tricky trades and very unpredictable, but I still thought DVAX was worth a mention as it appears to have a large favorable pattern also known as a cup and handle pattern.  The entire pattern is about 9 months in duration.  That is appealing just based on how long it has been forming. To me, a 9 month cup and handle is a lot more valuable than a 2 month cup and handle chart.

Anyway, it appears that the handle is almost done forming and we could see a big breakout type move out of this pattern, possible in August time frame.  One could also make the case that the handle portion of the DVAX chart is actually a smaller cup and handle pattern itself.  That is an interesting type of symmetry and something I do not see all too often.  It is a nice clear signal that helps to make for a clean move.

I really would not want to see anything below 1.74 on DVAX to keep this entire pattern intact.  If it does move below 1.74, then there could still be a case for an eventual breakout, but just for the sake of being ‘picky’ I think that is the standard that needs to be set here on DVAX.

I should also note that KERX, also a biotech stock has a somewhat similar looking pattern and did do a breakout today.  Not that the two have anything to do with each other, but they are both biotech stocks and sometimes you can get forward looking hints from other stocks.  Some of them lead the way and let you know that the same thing may happen for the next one in line.

Posted in Market Timing, Online Trading, Stock Picks, Stock Setups
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