This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

How To Trade Peregrine Pharma For Profits

Stocks in this article: PPHMDNDN

First, I look to see of there is a near-term catalyst that might help the stock. In Pererine's case, there are two. First, the company says it is receiving interest from large pharmaceutical partners for bavituximab partnership. Peregrine's CEO said Monday he wants to sign a deal as quickly as possibly, preferably before the company meets with FDA to discuss the design of the phase III trial.

Second, Peregrine plans to announce updated results from a phase II study of bavituximab in first-line lung cancer patients. These data should be released before the end of the year, and if positive would likely send the stock much higher.

With two, near-term catalysts ahead it makes sense to buy Peregrine here, keeping the chart as a guide for further entries and exits.

When the bavituximab data were announced on Friday, Peregine shares shot up from $3 to $5 before backing off. A close over $5 per share would mean the stock has a clear path higher, so I might want to buy a little stock here and add to it on a strong move over $5. Or, for those who want to play it even safer, just wait for the $5 level to break before entering.

I think it's quite possible Peregrine continues to frustrate the shorts and keeps going higher into one or both of the near-term catalysts mentioned above. A strong move in Peregrine's stock price above $5 would be a great signal.

As far as a stop level is concerned, I would trim my position under $4, which was the low on Friday afternoon after the data came out. I'd sell everything if Peregrine shares moved below $3. If the stock moves below $3 we can be assured the stock is going nowhere anytime soon.

With a stock like Peregrine where my conviction level is low, I keep my position sizes very small as well. There is plenty of opportunity to load up on stocks when one has more confidence but that doesn't mean traders need to avoid the stock altogether.

Rosenblum is long Peregrine shares.

Follow Dan Rosenblum on Twitter.

Dan Rosenblum has been a full-time stock trader since 1999 after leaving a job at a publicly held medical-device company. Rosenblum joined SharkInvesting.com that year and has been the online trading community's resident biotech expert ever since. Rosenblum writes the SharkBiotech.com newsletter, which has outperformed the S&P 500 and the Nasdaq Biotechnology Index every year since its inception in 2006. Rosenblum lives with his wife and kids in Rockland County, New York.
2 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,827.75 +12.81 0.07%
S&P 500 2,072.83 +5.80 0.28%
NASDAQ 4,787.3170 +29.0650 0.61%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs