One More Nudge for Prosensa Holding Should do the Trick (RNA)

Anybody who knows at least something about Prosensa Holding NV (NASDAQ:RNA) will at least know the stock turned into a disaster a few weeks ago, plunging from a close of $24.00 on September 19th to a close of $7.14 on September 20th, thanks to the failure of its MS drug drisapersen, which was jointly developed with GlaxoSmithKline plc (NYSE:GSK). Such is the life of a company with only one drug anywhere close to being approved; drisapersen was in Phase 3 trials - RNA shares could have just as easily gained 70% rather than lost 70% had the drug worked.

Yet, now that the dust has settled and the shock has worn off, it may be time to start poking around RNA again. See, the company still has six other programs in the pipeline. Although multiple sclerosis was the biggie, bear in mind that after a 70% beat-down, the new price of Prosensa Holding NV shares may fairly reflect the risk/reward-adjusted value of pipeline as it stands right now, following the failure (and unlikely future) of drisapersen.

In fact, it's the stock more so than the company that's the important part of the Prosensa Holding NV story right now. See, whether they're "supposed to" be doing it now or not, RNA shares are saying the market's testing the bullish waters here, and looking for a reason to get this stock rolling again. More than that, one more nudge could light that fire.... if it hasn't already.

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The nearby chart tells the tale. The $4.92 level was a problem in late October, again in late November (though the stock did trade above that level briefly around that time), and it was a resistance line late last week. The bulls aren't giving up, however, and if you look real closely, you'll see that RNA shares traded above the $4.92 ceiling for a while this afternoon. Though they're back under $4.92 now, Prosensa Holding NV shares are well within striking distance of a breakout. Any daily CLOSE above the $4.92 mark should do the trick.

The interesting and encouraging aspect of this brewing breakout is the fact that the media's rhetoric has also changed ... in favor of RNA. That, ironically, is the best thing the stock has going for it - the higher it goes, the more the media and traders talk about it, driving the price even higher, causing more news sources to talk it up. Such is the self-supporting nature of story stocks. Prosensa Holding NV could be one of those stocks, and a close above $4.92 could put the bidding/chatter cycle all the way into self-sustaining mode.

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