SGYP and TNXP...Trigger time..

I like pharmaceutical stock plays. It is a great way to flex my contrarian muscle because of the way things are structured. I used to work at a pharm company and I know that there are  stages of FDA testing that a stock has to get through before it makes it to market. The company spends large amounts of money and time for something to come down the pipeline that can be stopped at any time by the FDA and sent back to the drawing board or abandoned.
Pharm stock investors are therefore very forward orientated. In other words, hopeful. But unless the drug goes up for sale it wont do anything for the stock price.
So when you see stage 2 results or stage 3 results people will overbuy the stock. Its a great play for me to get in at the top and purchase a few puts if I think that the news, fundamentals and technicals warrant a return to parity, or a drop is on the way. In the long run, pharmaceutical stocks are a nice money maker because the crowd constantly hopes and overestimates.
Today lets take a look at SGYP. The had a good stage 3 clinical trial. Or did they?

NEW YORK (TheStreet) -- Synergy Pharmaceuticals(SGYP) shares are up 47.85% to $6.87 in early market trading on Wednesday after the company released the details of a 1,346 patient late-stage gastrointestinal drug treatment study.

The company said that 21% of patients treated with plecanatide at a 3-milligram dose responded to treatment as opposed to 10% who were given a placebo.

Really? Thats good news that 21% responded favorably to the medicine? Along with a spontaneous 10% who responded that took the sugar pill?

There is more:

“If successful in phase 3, we think Synergy would make an attractive takeout candidate since it owns full worldwide rights on plecanatide,” Davis said in a note to investors on May 22. Davis has an $11 price target for the company, more than double the current share price.

Irina Rivkind Koffler, an analyst at Cantor Fitzgerald LP, has also said that positive results from the trial could prompt a larger company to buy New York-based Synergy.

“These results strengthen our belief that plecanatide has the potential to not only effectively treat constipation but with a durability and tolerability profile that is ideal for chronic use,” Jacob said in the statement.

The company plans to report results from a second late-stage study in the third quarter, and file an application for U.S. approval by the end of the year. Synergy has “high confidence” that data from the second trial will be positive, Jacob said in the interview.

This is forward looking guidance based on favorable phase 3 studies. I believe this drug will need to be closer to market and that 11 dollar price target will be dependent on this drug being for sale in the market. And "high confidence" is just words, providing that the trial goes ok. Pump, Pump Pump. Lets look at the chart for today:

See the current candle today? It has no body and its shaped like a graveyard cross. Now look at the points that I circled on the top RSI indicator. Everytime it got into this range there was somewhat of a pullback. Look where it is now. With a few bad days of the QQQ/Nasdaq in front of us I think that this is a good shorting/put play. If more news comes out that would mess this up, but I pretty much feel the cork has been popped. Pros trade in the afternoon so I get in before they take over after lunch. I am going to go out to the Julys with this one. In at.25:

Now for the next order of business, That stock that I told to watch is now close to flashing the signal. I am going to wait until 2:30-2:45 Central time before I decide if today is the day to jump in. It actaully flashed the top signal earlier today but then the signal winked out and I need to see if it throws it again before close. If it does, Ill get in with a put.
Check back 10-15 minutes before market close.

Mark