Market Manipulation is at an all time high for $ECTE!

Technical charts won't identify the culprit at hand. If you resort to technical charts, you'll be utterly confused and might be tempted to sell. Instead just watch level 2 data and analyze individual transactions -- either through a waterfall ticker (as illustrated below), or a tick-by-tick module provided by a reputable stock tracking provider.

You don't have to be a genius, to realize that the price-per-share is heavily being manipulated, with the sole intent to lower it. I've watched numerous times -- a group of individuals peter panning, small lot transactions between themselves -- hoping a sucker would see the declining price-per-share and sell. Of course, a sucker is commonly found, and as a result causes the price-per-share to plummet even more once the faux pas orders are removed.

The illustration below: Depicts the manipulation process taking place. Minutes after the market has closed, it is swamped with all-or-none transaction orders to sell at a relatively discounted price ($1.10). They wait a while for a sucker to latch, and immeditately remove their transaction orders without any paper trial.

Novel approach for tracking glucose - $ECTE

Echo Therapeutics ($ECTE) is an interesting company. They are developing a needle-free, wireless, easy-to-use and low-cost continuous glucose monitoring system for people with diabetes and hospital critical care units. Till now, all existing FDA-approved continuous glucose monitoring systems have been through either a subcutaneous (under the skin) or an intravenous (directly into a vein) injection. Both methods increase chances of infection and inflammation, cause bleeding at the insertion site, and known to be uncomfortable.

The unit's first component is the Prelude® SkinPrep System  The system is a wand shaped device that painlessly exfoliates dead skin cells on the patient's outermost layer of skin. The company believes Prelude® alone can be effective in the transdermal drug delivery market, allowing a safe and cost effective skin permeation process 100 times greater than with untreated skin.

Echo's lead product is the Symphony® tCGM System. Once the permeation process is complete, the bio-sensor is attached, allowing the patient to monitor their blood sugar levels every minute for a maximum of three days before being relocated to another spot. Symphony's wireless technology allows the results to be monitored on either a smartphone, computer, or a tablet. When the patient's glucose levels reaches a number outside the target range, an audible alarm will sound the alert.

Echo Therapeutics currently has two key strategie partnerships in place, one in the area of drug delivery and the other in analyte extraction:

Echo has granted the Ferndale Pharma Group, Inc. and its wholly owned subsidiary Eloquest Healthcare Inc. a license to develop, market and sell the Prelude device for enhanced, fast-acting and needle-free delivery of Ferndale's topical 4% lidocaine product.

Echo has granted Handok Pharmaceuticals a license to develop, market and sell the Symphony® tCGM System to continuously monitor glucose levels in diabetics and hospital patients in South Korea.

Corporate Presentation: Link
Companies' Website: Link

$ZGNX set to break $2

Just as I've expected, $ZGNX appears to be forming a bullish continuation pattern (cup-and-handle). This pattern should mark a consolidation period followed by a breakout. I did put up a post related to this company a week prior when it's sentiment was in the shitter. At the time, mass hysteria was the driving force responsible for the price action. Majority of people were mindlessly overselling in droves. I was one of the few people praising it and holding on to my shares. If you haven't read my original post, please do so to familiarize yourself with what is responsible for the formation.

As the markets slowly disseminate the information available, we should expect $ZGNX to return back to it's original base price ($2.36) prior to the independent advisory panel. There are two things we need to monitor if we expect a breakout: price and volume. If the price breaks $1.44 and volume exceeds 2.5 million purchases, expect a major price adjustment!

$ZGNX - Advisory panel votes against Zohydro ER™

$ZGNX lost half of their value on Monday after an independent advisory panel ("AADPAC”) voted against approving the company's painkiller drug Zohydro ER™. The panel does not make the final decision regarding approval of a medication, instead it merely offers independent expert advice and recommendations to the FDA based on preliminary analysis of key efficacy and safety data.

For all it's worth, the advisory committee voted 11-2 [with 1 abstention] against the approval of Zohydro ER™. The independent panel of experts said $ZGNX met regulatory targets for safety and efficacy, but were rejected because they worried Zohydro ER™ could become a drug of choice for people addicted to opiod painkillers. This decision was largely linked to the active ingredient hydrocodone found in Zohydro ER™.

To be fair, I believe the motive for the decision is largely based on anecdotes and not facts. If given the proper circumstances, abuse can be circumvented by imposing restrictions.

Dr Bob Rappaport, director of the FDA's division of anesthesia, analgesia and addiction products, said regulators must decide whether the panel's decision was based on a tangible difference between Zohydro ER™ and opioid-based medications already available in the marketplace. Otherwise, he told the panel, "you're punishing this company and this drug because of the sins of the previous developers and their products. And from a regulatory standpoint, that's not really something we can do."  (David Morgan, Reuters)

An estimated 116 million people in the United States are burdened with chronic pain, at a national economic cost of $560 to $635 billion annually. If approved, Zohydro ER could be the first hydrocodone product to offer the benefit of less frequent dosing and the ability to treat chronic pain patients without the risk of liver injury associated with the use of acetaminophen in high dosages or over long periods of time. (Zogenix.com)

Wall Street analysts say FDA approval could bring Zogenix up to $500 million in annual sales from Zohydro by 2019, or more than ten times the pharmaceutical company's expected 2012 annual revenue of $45.5 million. (David Morgan, Reuters)

I strongly believe, the FDA will not follow AADPAC's decision. Unlike the independent panel, there will be a comprehensive review of the data related to the clinical trials ruling out any misconceptions on the drug. There is also a strong market for an effective and safe chronic pain relief drug. The FDA quite frankly cannot afford the final verdict to lay waste to logical fallacies. The target action date for FDA review is March, 1, 2013.

My sentiment is to BUY the stock and wait. The reward outweighs the risk, and given a few months of wait the returns can be astronomical!

Related SEC Filling: Link
*UPDATE: Insider Purchase Transaction Occured on 12/11/2012 at $1.15*