Don't read to much into this morning's strength from stocks. There's not quite as much support as it seems there is on the surface. As such, it's still prudent to pick and choose stocks carefully. Among the more interesting charts we came across today are MedaSorb Technologies Corporation (OTC:MSBT), Encorium Group Inc. (NASDAQ:ENCO), and MannKind Corporation (NASDAQ:MNKD). Let's take a close look at each one.

We last mentioned MannKind Corporation (NASDAQ:MNKD) was about to get a lot more bearish back on October 14th, and the stock didn't disappoint. Since then we've watched the stock fall from $5.84 to $5.50, and move decisively under a key support line.

The trigger from nearly two weeks ago was the slide under a key 61.8% Fibonacci retracement line at $5.93. MannKind Corporation have traded as low as $5.02 since then, but more importantly have tested that line again as resistance.... and failed to move back above it.

That said, though MNKD is still below that key support level, I'll also acknowledge it's still battling to get back above it (we've seen some closes near the highs of the day of late from MannKind). Before piling on a short/bearish trade now, you may want to wait for the stock to move back under today's low of $5.36 before taking a position. Just think of it as a little extra caution. Don't misread that though - the tide is still bearish.


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A little good news for anybody who still owns MedaSorb Technologies Corporation (OTC:MSBT)... the pain suffered over the last three days may finally be at an end (though I stress 'may').

The fall from a peak of $0.442 to today's low of $0.2012 was a painful 54% loss. However, it was also a near-perfect 61.8 retracement of the August/October rally. Ergo, one could make a strong case that MedaSorb Technologies simply needed to find support at a major Fibonacci level before staging a rebound. And so far today, MSBT has at least done the former by pushing up and off the Fib line at $0.2066.

It's still a little soon to be counting unhatched chicks, but this offers MedaSorb Technologies owners a glimmer of hope. As long as MSBT closes above $0.2066 it will stay in the hunt for a rebound; a close above today's high at any point in the future - ideally on higher volume - would be a great sign of upside movement.


And finally, Encorium Group Inc. (NASDAQ:ENCO) caught my interest today, not because of its strength, but rather because of its pace.

How many times have we all seen a ridiculous surge from a stock, followed by a massive pile-on from too may other investors, only to see the char crumble under the weight of its own gains? That's why I rarely latch onto breakouts - most fail. Encorium Group isn't doing that though; quite the opposite actually. ENCO has made a very nice, slow, bowl-shaped upside reversal over the last week and a half.... The kind that's sustainable. Better still the two days that have performed the bulk of the bullish work since last week have been high-volume gains.

I'm still undecided about a target for Encorium Group. Heck, I'm still not totally convinced about any impending rally. If I were forced to make a guess here though, I'd have to be bullish on ENCO. If you weren't as bold, you could wait for Encorium shares to move above last week's peaks of $0.53.  That still leaves some meat on the bone.

If you'd like to know of any changes in our opinion of MSBT, MNKD, or ENCO (or if we officially recommend them as trades), be sure to sign up for our free newsletter today. It's delivered weekly.