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Play of the Day (For Thursday)
Interactive Chart
Wednesday, May 30, 2001

CIMA - Cima Labs $76.70 -0.25 (+1.90)

Tuesday's Comment:

Cima Labs has been steadily forging ahead since 4/27/01, when it announced the U.S. launch by AstraZeneca (NYSE:AZN) of its Zomig- ZMT orally disintegrating migraine headache compound. Cima specializes in producing products for pharmaceutical companies that are based upon its OralSolv and Durasolv drug delivery systems. This enables patients to ingest drugs through fast dissolving technologies without the use of water and without any adverse tastes. Turning to CIMA's chart, we see that the stock has just broken out of a seven-month base pattern. Today's strong advance was a new closing high for the stock and judging by the width of CIMA's base, the price target on CIMA becomes $107. Traders wishing to initiate positions in CIMA could look to do so on an advance above today's high of $75.35 on volume of at least 300,000 shares. We need volume to come in strong to confirm CIMA's strength. Speaking of volume, we issue one caveat regarding CIMA: volume can be weak at times, which adds to the biotech stock's volatility. Therefore, this is an aggressive play that might call for half positions. Our initial stops are set at $67.95 to protect against a turnaround.

Wednesday's Update:

Shares of CIMA largely avoided Wednesday's market downdraft. In addition, big block trades continue to trade intraday in CIMA without serving to knock the stock lower. This is a dead giveaway that institutions are accumulating the stock and that they are paying up for shares on the ask. We will watch for support at the 10-dma of $73.93 to continue providing a crutch for the stock and for the MACD to remain positive going into the latter part of this week. Traders looking to initiate a position in CIMA could aim to do so on a break above the previous high of $77.90 on volume that puts the stock on track to do 300,000 shares for the day. Our stops remain at $67.95 to keep our downside risk manageable.

Picked on May 29th @ $76.95
Change Since Picked -0.25
Stop Loss @ $67.95

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