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Northfield Labs - NFLD - close: 15.39 chg: +0.92 stop: 14.14

Company Description:
Northfield Laboratories Inc. is a leader in developing an oxygen-carrying resuscitative fluid, PolyHeme, for the treatment of urgent, large volume blood loss in trauma and resultant surgical settings. PolyHeme is a solution of chemically modified human hemoglobin that requires no cross matching and is therefore compatible with all blood types. It has a shelf life of over 12 months. Enrollment is currently underway in a pivotal Phase III study of PolyHeme beginning in the pre-hospital setting. (source: company press release)

Why We Like It:
Nowadays we have to label almost every biotech play as high-risk and aggressive. It doesn't matter if we're bullish or bearish. With so much riding on new drug development that any sort of new release could send the stock rocketing one way or the other. That's great if you're on the right side of the trade and it's stomach turning if you're not. Traders absolutely need to play with stop losses here but even stop losses won't save us from a gap down. Okay, enough with the cautionary comments. We like NFLD because the trend has changed. The stock sank from January through March in a very consistent manner. Then the stock began to bounce ahead of its Q1 (actually Q3 for NFLD) earnings report. Then, despite a worse loss than expected, the stock soared after the company reported good news for its blood substitute. The product is called PolyHeme and NFLD said the phase III study has been allowed to continue after an independent safety panel recommended the study go on without change. If this product is eventually approved it could be worth billions. Looking at the daily chart of NFLD we see that shares consolidated sideways after the initial reaction on April 11th. Then as the stock coiled into a tighter and tighter range it has now broken out to the upside. Today's 6.3 percent gain pushed NFLD above its simple and exponential 200-dma. As bulls on the stock we are fighting against a bearish P&F chart but we believe the trend has changed. Our target is the $18.00 level but watch out for the simple 100-dma, currently near $17.00, it could be resistance. Our time frame is six to eight weeks.

Picked on April 25 at $15.39
Change since picked: + 0.00
Earnings Date 04/11/05 (confirmed)
Average Daily Volume: 471 thousand


The South Fincl Group - TSFG - cls: 27.05 chg: +0.87 stop: 26.05

Company Description:
The South Financial Group is a financial services company, headquartered in Greenville, South Carolina with approximately $14.7 billion in total assets and 155 branch offices in Florida, North Carolina, and South Carolina. TSFG focuses on fast-growing banking markets in the Southeast and concentrates its growth in metropolitan statistical areas. TSFG operates two subsidiary banks. Carolina First Bank, the largest South Carolina-based commercial bank, operates in North Carolina, South Carolina and on the Internet under the brand name, Bank CaroLine. Mercantile Bank operates in select Florida markets. (source: company press release)

Why We Like It:
Pure and simple this is an oversold bounce play. Shares of TSFG broke down below support near $29.50 a couple of weeks ago and has sunk toward its May 2004 lows (see chart). Now with financial stocks on the rebound in addition to the major market averages bouncing higher shares of TSFG are finding bargain hunters. We like today's bullish engulfing candlestick pattern, which is typically seen as a bullish reversal especially at the end of a downtrend. More conservative investors may want to wait for confirmation of the pattern with some follow through tomorrow. We're aiming for a move to $29.00 but we'll pay attention to possible resistance at the 10-dma. If the bounce falters too much we'll jump out.

Picked on April 25 at $27.05
Change since picked: + 0.00
Earnings Date 04/18/05 (confirmed)
Average Daily Volume: 291 thousand

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