AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) stock had an absolutely amazing day in the market yesterday. After making an announcement that shows the company still has faith in tivozanib, investors got excited; pushing the stock higher by more than 100%! However, late in the day, we saw a bit of a correction. Nonetheless, it looks like the stock is gearing up for another breakout. So today, we’ll take a look to see what the charts tell us about the short term, and what we can expect to see in the long run from the company. So, let’s get right to it…

Technically AVEO Looks Like It’s About To Pop

If you look at the 5 day chart for AVEO Pharmaceuticals, you’ll start to see a few things very clearly. First off, you’ll notice that yesterday, the stock saw dramatic gains. Because market movements are generally a series of overreactions, a correction followed, giving the market a rest. As a result, we’re starting to see a very familiar shape in the chart; a flag! If you’re not familiar with flags and technical analysis, it may be a good idea to read this. Nonetheless, when we see a flag in the chart, it’s generally a signal that the market is taking a rest from the latest big trend and is likely to continue on the trend’s path relatively soon. So; based only on what the chart’s telling us, we can expect to see another breakout soon!

What We Can Expect From AVEO Pharmaceuticals Stock In The Long Run

In the long run, I’m also expecting to see overwhelmingly positive news. To understand why, you’ve got to look into the reason for the climb in the first place. Unfortunately, AVEO has been dealt a pretty bad hand recently. After failing to get the sign ups it was looking for in a breast cancer study, the company got rid of the study and looked for a new niche. That came after the company’s drug tivozanib was shot down by the FDA after inconsistent data results. At this point, many other companies would have given up and looked for other candidates. However, the team at AVEO believes in the work they’ve done on tivozanib and isn’t to give up on it. Instead, they’ve found data that supports the fact that tivozanib could be effective as a third-line treatment in advanced RCC. As a matter of fact, AVEO sought FDA guidance about the 314 subject Phase III trial of the medication. The bottom line here is that AVEO knows it has a gem, and as investors, we know that the company is determined and focused on bringing that gem to life. In the long run, this will prove to be profitable.