Do you remember back in Early 2007 when DNDN was trading for about $4 and then over night gapped up to about $18? I remember it very clearly because some of my friends made hundreds of thousands that day.

DNDN gapped that day because because an FDA advisory commitee had reviewed their drug and found it adequate. Here is an excerpt from the press release:

“the U.S. Food and Drug Administration’s (FDA) Office of Cellular, Tissue and Gene Therapies Advisory Committee recommended to the FDA that there is substantial evidence of efficacy and safety of PROVENGE (sipuleucel-T) for the treatment of patients with asymptomatic, metastatic, androgen-independent (also known as hormone refractory) prostate cancer. The FDA will review the advisory committee’s recommendations.”

DNDN’s drug wasn’t even cleared yet.

Fast foward to 2009 and GTCB’s anti-clotting drug Atyn has been given positive comments by the FDA staff reviewers. A final decesion could be made this Friday. GTCB is still trading at under $1.00 although it has made quite a substantial gain already.

Playing bio tech companies can be very dangerous but rewarding too. I believe GTCB’s current price still makes it very attractive as the upside potential could be 200-300% from these levels.

I’m always searching for great traders and to learn a little about their strategies. Recently I had the opportunity to do a short email interview with a trader from South America who had made $50k in just one month.

He considers himself a trend and basket trader. Here is how it went:

Q: Can you tell me alittle about your trading strategy?

A: I am scalper or sometimes position day trader so I like looking trend stock and add size (pyramid) but when I find a good trend day I am a basket trader.

For example, I will be buying a basket of serveral stock of 100 shares and if it goes good so i will buy other 100 …..

Q: Lets say you find a good trend and you buy a bunch and it goes up and you buy some more, when do you feel like you will take profits and if it drops where do you take losses at?

A: I like technical analysis so I look chart SPY or Dow and trade with them. Sometimes if its strong day I let it run till the close , or sometimes I look for target level of spy.

For Stop I use technical, sometimes I have an amount dollar of stop or level of spy or dia.

The last month some days I bought or sold baskets the last 10 minutes of market, strong or weak day.

For example a basket of 60 position of 600 shares.

This lesson also points out basic support and resistance strategies. As with any type of charting strategy it is not exact science but the use of it can increase your probabitlity for profits.

This is sometimes called the box strategy which was made popular Nicolas Darvas in the Book – “How I Made $2,000,000 in the Stock Market.” written back in 1961.

If you view the chart below on ANR you will see that it bounced off the $14.50 level 3 times and moved up to a resistance of $22.50. Obviously when it happens the first time you won’t know that these are support or resistance levels until it happens again.

After the third bounce it’s a good chance it will eventually test the top resistance level again. If it breaks above the $22.50 level, this an be called a break out. To play this correctly you would have to give yourself alittle room on the down side.

1. Enter the stock before it makes the second bounce and give yourself a stop loss of atleast .50 in this case incase it doesn’t bounce exactly off the first support level.

2. Enter the stock after the second bounce and it is headed back up with a stop loss at the bounce level.

3. Exit the stock after it test the top levels and failed to break it.

4. If the stock breaks the top risistance and continues upward, use the resistance level as a stop loss, or use a trailing stop if the stock continues much higher.

SSCC has taken quite a beating over the last year and with demands for cardboard down the company’s stock has slipped to a 52wk low.

The company is facing a due date for it’s coming $800 million revolving credit line this coming Nov. 2009 but I’m not concerned since that is still a ways off.

I believe at these levels, SSCC could see huge potential upside since it’s 52wk high was $10.90.

Profile:

Smurfit-Stone Container Corporation, through its subsidiary, Smurfit-Stone Container Enterprises, Inc., manufactures paperboard and paper-based packaging products in primarily North America.

It produces a range of corrugated containers to protect, ship, store, and display products made to its customers merchandising and distribution specifications. These corrugated containers are used to transport home appliances, electric motors, small machinery, grocery products, produce, computers, books, and furniture.

Here’s a link to my post last month where I stated a candle stick was formed in the markets. I believe that candle stick was the bottom.

This doesn’t mean we are out of the woods yet, as 2009 will be another tough year for the markets. There will still be many stand out stars.

The solar industry looks like it could be turning around and should show some strength in 2009 wiht Obama taking office.

Here’s a list to add to your watch list:

FSLR
SOLR
JASO
ESLR
STP
SPWR

It’s their fault for putting out cars no one wants. If you’re going to put out a car that cost $11,000 atleast make it look nice like a mercedes. I’m sure you might not have all the features but make the body attractive enough for people to buy.

Here’s 3 penny stocks to watch.

WGAT – Volume Alert
http://www.chartmoney.com/stockquotes.php/?ticker=wgat
WorldGate Communications, Inc. engages in the development and sale of video phone products and technology in the United States and internationally.

NTRZ – News
http://www.chartmoney.com/stockquotes.php/?ticker=ntrz
NutraCea Closes $10M Credit Facility Financing With Wells Fargo Bank

NEXM – Volume Alert
http://www.chartmoney.com/stockquotes.php/?ticker=nexm
NexMed, Inc., a pharmaceutical and medical technology company, engages in the development of transdermal products based on its proprietary NexACT drug delivery technology.

Markets got a late day rally after the Feds lowered key interest rate to a historic all time low of 0 to .25 percent.

CDNS – Coming Off 52wk Low
http://www.chartmoney.com/stockquotes.php/?ticker=cdns
Cadence Design Systems, Inc. develops electronic design automation software and hardware for electronics companies worldwide.

HSPO – Momentum
http://www.chartmoney.com/stockquotes.php/?ticker=hspo
HealthSport, Inc. is a fully integrated developer, manufacturer and marketer of unique and proprietary branded and private label edible film strip nutritional supplements and over-the-counter drugs.

PCSV – Volume Alert
http://www.chartmoney.com/stockquotes.php/?ticker=pcsv
PCS Edventures! is the recognized leader in the design, development and delivery of products and services rich in technology, imagination, innovation, and creativity that make learning easier, more engaging, and more effective at all levels.