DRTX

Lets take a look at DRTX today:

DRTX has some news that caused it to jump:

8:01 am Durata Therapeutics announced that they have received a SPA from the FDA on the design of its Phase 3 study of DALVANCE (DRTX) : Co announced that the company has received a Special Protocol Agreement from the Food and Drug Administration on the design of its Phase 3 study of DALVANCE for injection using a 1500 mg single dose for the treatment of patients with community-acquired pneumonia requiring intravenous therapy.

• "In addition to pneumonia and the 1500 mg single dose study in ABSSSI, which is already underway, we look to begin our Phase 3 pediatric osteomyelitis study next year. Important bone penetration data in support of our osteomyelitis development program will be presented in an abstract at IDWeek on Thursday, October 9th"

Look at the last paragraph above. "We look to begin our Phase 3 pediatric osteomyelitis study next year". That means nothing until next year. Then they have to have the FDA approve the Phase 3 study or its back to the drawing board. Then they have to pass a Phase 4, etc. Lots of things can go wrong and stop the development. Probably wont have it hit the market if at all until 2016-2017.
So you can see that there was a irrational jump of the stock price with the above news today. Lets look at the chart below:

Several things here: This stock has been in decline overall Since July 7th. Also check out August 3rd, with the sudden jump with the big white solid candle. The stock had a solid white candle, which shows a strong move up. then a smaller white candle with a upward tail, then deflation.

I will be looking for the same thing with this stock. Tomorrow I expect even more of a move upward, AND IF THAT HAPPENS I will then jump in tomorrow with some puts and hopefully ride the stock down. IF THAT DOES NOT HAPPEN I will simply do nothing. This will be a conditional trade and we will be looking at the price action of this stock for tomorrow.
Keep your eyes peeled and stay frosty.

Mark