Avanir Pharmaceuticals (AVNR)

Company

"AVANIR Pharmaceuticals is focused on developing, acquiring and commercializing novel therapeutic products for the treatment of chronic diseases. AVANIR's products and product candidates address therapeutic markets that include the central nervous system, cardiovascular disorders, inflammation and infectious diseases. AVANIR currently markets FazaClo®, the only orally-disintegrating formulation of clozapine for the management of severely ill schizophrenic patients who fail to respond adequately to standard schizophrenic drug treatments. FazaClo is also indicated for reducing the risk of suicidal behavior in patients with schizophrenic or schizoaffective disorder. AVANIR's lead product candidate, Neurodex™ for the treatment of involuntary emotional expression disorder, is the subject of a New Drug Application under priority review with the FDA. Additionally, AVANIR has initiated a Phase III clinical trial with Neurodex as a potential treatment for patients with painful diabetic neuropathy. AVANIR has active collaborations with two international pharmaceutical companies: Novartis International Pharmaceutical Ltd. for the treatment of inflammatory disease and AstraZeneca for the treatment of cardiovascular disease. The Company's first commercialized product, abreva®, is marketed in North America by GlaxoSmithKline Consumer Healthcare and is the leading over-the-counter product for the treatment of cold sores." (company website)

Buy

6-Sep-06. After peaking in March, Avanir took a steep nose-dive that ended (I hope, I think) shortly after the company reported earnings. The 50-day moving average has turned up. This is supposed to be a good entry point.

• Price momentum (PPO) — picked up sharply after reaching low following earnings
• Trend (ADX) — has generally weakened, but I believe that reflects the cross-overs of buying- and selling-pressure
• Money flow (CMF) — essentially neutral after periods of strong out-flow
• Relative strength (RSI) — neutral
• Volume — could be stronger

Sell

15-Sep-06. "Good entry point"? — I don't think so. AVNR busted right on down through the 1-month moving average and kissed up with the lower Bollinger band yesterday. Today it is stretching it downward. This is not how it was supposed to be. But then, if I am honest with myself, there were a lot of yellow warning flags in the chart in the form of indicators going the wrong way at the time I bought. There must be a moral here somewhere.