NEW BULLISH Plays
Enzo Biochem, Inc. - ENZ - close 6.67 change +0.24 stop 7.70
Enzo Biochem, Inc. (Enzo) is a life sciences and biotechnology company focused on harnessing biological processes to develop research tools, diagnostics and therapeutics and on serving as a provider of diagnostic services to the medical community. The Company is engaged in research, development, manufacturing and marketing of diagnostic and research products based on genetic engineering, biotechnology and molecular biology. These products are designed for the diagnosis of and/or screening for infectious diseases, cancers, genetic defects and other medically pertinent diagnostic information and are distributed in the United States and internationally. The Company operates in three segments: Enzo Life Sciences, Enzo Therapeutics and Enzo Clinical Labs. On March 12, 2009, the Companyâ€™s subsidiary Enzo Life Sciences, Inc. and Enzo Life Sciences Acquisition, Inc., a newly formed wholly owned subsidiary of Enzo Life Sciences, Inc. acquired Assay Designs, Inc.(source: company press release or website)
Why We Like It:
ENZ broke out of horizontal resistance, which should now act as support in the $6.45 area on Friday. I expect the stock to turn back and retest this area which is where I would like to enter the stock. I consider this to be an aggressive play so please use small position size to limit risk. There are two things to be aware of. First, the average daily volume on this stock is 160,000 but it has been increasing on the breakout which is a bullish sign. Second, there are two areas where traders can place stops: 1) just below the 20-day SMA at $6.10 which will limit risk but could also shake you out of the trade; or 2) just below the 50-day SMA at $5.91 which is a little more aggressive if ENZ reverses. Our official stop will be $5.91. Our first target is $7.20 and our second target $7.70. Our time frame is a couple of weeks.
From a fundamental perspective, ENZ may benefit from the healthcare reform bill as they provide technology to reduce costs and streamline biotech research and development. If this story becomes more mainstream these types of stocks could see shares spike. These are just my thoughts about some recent articles I've read about who will benefit from the bill.
*NOTE: Please use small position size to limit risk as I consider this to be an aggressive play. The stock's average daily volume is 160,000 which can add to volatility.*
Suggested Position: ENZ stock @ $6.52
Entry on April xx at $xx.xx
Earnings Date 6/15/10 (unconfirmed)
Average Daily Volume: 160,000
Listed on April 24, 2010