Repeat Performance In Aveo Pharmaceuticals After Spike In Price

em>Joel Elconin is the co-host of Benzinga's #PreMarket Prep, a daily trading idea radio show.

Aveo Pharmaceuticals Inc. AVEO shares are trading higher by $0.61 at $1.78 in Monday's session. The issue has retreated over $1.20 from its premarket high ($2.97) and $0.80 from its intraday high of $2.55. What sparked the rally was the announcement of a licensing deal with Novartis, in which the company will receive an upfront $15M payment as well as up to $311 in milestone payments. Today's trading action certainly resembles the price action in the issue on May 21. On that day the issue spiked to $3.50 following the results of TIVO-1 study for renal cell carcinoma. However, it turned out to be a "sell the news scenario as the issue retreated from the highs to close at $2.23. Over the next three months it drifted lower and make a new low for the recent slide on at $1.14 and ended the day $1.17. After flirting with the $3 level in the premarket trading. the issue managed a higher open at $2.47, but the rally lasted only another $0.08 to $2.55. From that level, it has continued to make new lows for the session and may not even end the session over.$2.