Theravance, Inc. (THRX)

Theravance, Inc. is a bio-pharmaceutical company. It falls under the sector "Healthcare" and industry "Biotechnology". A look at "$BPHEAL" (Healthcare sector bullish percentage index) clearly shows that most of the stocks in this sector are bullish, this means that stocks in this sector are more likely to establish and/or continue an uptrend in the near future. Apart from this the stock's industry "Biotechnology" is also currently in a very strong position (Look at John Murphy's Industry Groups).

Now that we have established that the stock is in a strong sector and industry lets examine the daily and weekly charts for THRX.

The chart above is a daily charts for THRX. I will briefly point out the bullish signals/features on this chart:
1. The stock is trading above both its 50 day and 200 day moving average.
2. On the most recent day of trading (November 29th) the stock broke out of resistance at $23.00, and has no overhead resistance on this daily chart (which shows 6 months of trading).
3. This recent breakout was accompanied by huge volume on the day of breakout.
4. The stock's daily RSI is decisively above the zero line and has remained there for a long time.
5. A recent MACD crossover can be seen on the chart.

Now lets examine the weekly chart for THRX. This chart is showing some really strong bullish signals. I will point them out here:
1. The stock broke out of resistance at $23.00. Last over head resistance is more than three years old (making it insignificant).
2. The RSI for THRX is above the zero line and seems to be in an uptrend.
3. In August 2010 the stock traded at $12.00 a share and since then it has increased more than 100% in just a few months. This is a very important signal, it means that if the stock is to continue an uptrend it will most likely be as rapid as the last one.
4. Lastly, the stock is trading above both 50 week and 200 week moving averages.

You might have noticed that one important bullish signal is missing on the weekly chart i.e. increased volume during breakout week. But, so far the stock has traded just on Monday of the breakout week and on the daily chart we can see that it indeed traded on huge amounts of daily volume. We just have to wait for the other four remaining days of the week to clearly see the increased volume on the weekly chart as well.

I think that THRX is presenting a very good buy opportunity right now; it is in a strong sector and industry, and the technical indicators are signaling that it will most likely have a good bullish run for the next 3-4 months. A good sell point can be $30.00-$35.00 per share, which represent an old trading range for this stock from back in 2007.

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