Also displaying relative strength today is Cadence Pharmaceuticals (CADX), a biopharmaceutical company focused on in-licensing, developing and commercializing product candidates for use in the hospital setting. Cadence has rights to product candidate Ofirmev, an intravenous formulation of acetaminophen for the management of pain and reduction of fever in adults and children. This stock is off by 18% so far in 2011.
If you take a look at the chart for Cadence, you'll see that this stock was hammered lower during the past six months. The stock hit a 52-week high of $10 a share back in early June and dropped to a recent low of $5.80 a share, which the stock hit today. After hitting that low, the stock has turned around and jumped higher to trade up to over $6 a share. What's interesting about the strength in the stock today is that's coming off a huge prior support level that dates back to early 2009 at $5.68 a share. It's possible that the relative strength in CADX today is flashing a bottom for this stock in the near-term.
At last check, the stock was trading up 5% at $6.09 a share on volume that's tracked in so far at over 180,700 shares. That volume is still well below its three-month average volume of 334,000 shares, but market players should check to see where it clocks in at the close of trading.One could be a buyer of this stock off any weakness and simply stop out of the trade if the stock moves back below today's low of $5.80 a share. If this stock has put in a bottom, then look for a run back toward $8 a share or possibly higher if the bulls gain control. Also note that the current short interest as a percentage of the float for Cadence is a whopping 39%. Since this stock has such a huge short interest, the short-sellers should have been all over this one today, knocking it lower. The fact that that's not happening implies that some big buyers might be stepping in here forcing the shorts to do some covering.