The Next Blockbuster Drug

DNDN’s Explosive Move

By Bryan Bottarelli
Tuesday, April 14, 2009 10:22 AM EDT
Tue, 14 Apr 2009 14:22:00 GMT

Dear Bottarelli Research Member,

Good morning. A quick look at the Dow chart below shows you that we’re witnessing a wrestling match right at the 8,000 level. From a technical perspective, the Blue Chips could fall from 8,000 to 7,500, find support at the 50-day moving average, and still be within the parameters of a bull market rally. In my opinion, this is the most logical and expected move. But as you know, nothing in today’s market is logical or expected. Therefore, we’ll continue to play the intra-day moves in the best possible way — which entails taking positions on both sides of the market.

INDU

As you know, we continue to maintain a group of positions that accomplish this goal. We’re long gold via the AEM May 50 Calls (AEM EJ). We’re short the financial sector via the FAZ May 10 Calls (FAY EB). We’re long in the fertilizer sector via our MOS May 45 Calls (MOS EI). And we’re short Treasuries via the TBT June 44 Calls (TBT FR).All of these positions are either at our entry prices or slightly below. Maintain all four positions.

In the meantime, we’re receiving some explosive news today out of Dendreon (DNDN – NASDAQ). According to company officials, they just completed an “IMPACT” study on 512 men with advanced prostate cancer who no longer responded to hormone therapy. Results showed that Dendreon’s prostate cancer vaccine Provenge significantly prolonged the overall survival of patients compared to a placebo. On the news, shares of DNDN are blasting off, as you can see below:

DNDN

As you probably know, a panel of outside experts originally voted to approve Provenge in March 2007. But in May of 2007, the FDA rejected the panel’s recommendation and asked DNDN to complete further IMPACT studies. Today, the results of these studies show that Provenge should be approved by the FDA. In short, this could be the next blockbuster cancer drug.

If you’ve been a Bottarelli Research member for an extended period of time, then you’ll recall that I posted a special report titled “The Takeover Report” on Wednesday, August 27th 2008, which recommended buying the DNDN January 2010 7.5 Calls (WTK AU) at or under $3.50 per contract. Today, these calls have traded as high as $14.85, good for a remarkable 324% gainer. Needless to say, if you own these calls, take your money and run! Congratulations on an explosive winner, and if you have a moment, drop me a line and tell me how you did.

Going forward, I still think DNDN has room to move higher, so I might make some additional plays on any coming dips. Stay tuned.

But until then…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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