The BioTech Bounce: Alexza Pharma

Biotech stocks are often one of the first subsectors to bounce in a bear market and/or harsh selloff; this is the case because the overall valuation of these companies is based off of market independent actions. Shares of biotechs that are liquidated in a harsh sell off are typically done for liquidity purposes, not for valuation. So…what biotech company could be ripe for a bounce—Alexz Pharmaceutiacls

. Shares of Alexza Pharmaceuticals are trading flat o the session, at $1.21; shares have been hovering above the $1.20 level for the past few days, working off selling pressure. With selling pressure looking like it will abate, a bounce could be in the cards. Given that shares were trading $1.90 only a few weeks ago, valuation has come in and become more favorable, not to mention the technical, oversold nature of the name. First resistance would occur at $1.40, followed by $1.50. Given the potential average payout of 19.8% versus a stop loss at the recent low ($1.14, or -6.1%), there is a lot of favorable risk/reward here. Alexza Pharmaceuticals, Inc. is a pharmaceutical company focused on the research, development, and commercialization of products for the acute treatment of central nervous system conditions.