We wrote about DNDN in early December, after they released news of a royalty sale for $125 million. Sometimes that can be the sign of a desperate company, especially one that has been burning through cash at a high rate. But we thought the opposite and that the calls would be a nice play going forward, as we wrote here.
Turns out those have been quite a profitable trade, as DNDN has surged more then 50% from the December lows closing at $13.31 today. It's anyones guess if this current 3 day monster run continues on the pre-announcement of "better-than-forecast fourth quarter 2011 revenue ". DNDN still has a questionable future, and will be in trouble if its only revenue driving drug fails.
For now, its best to play the hype, and lock in profits when you can. Its usually the people looking at the chart, waiting for a retest of the stocks highs, that are holding the bag a few weeks later wondering what happened.
Figure short term top of $15-17 to lock in profits, and hold some calls for possible $20 test.
