Don't Get Greedy (or euphoric) With Galena Biopharma (GALE)

The last two weeks have been absolutely fantastic ones for Galena Biopharma Inc. (NASDAQ:GALE). Shares have soared from $2.37 to the current price of $3.32 - a 40% pop - rewarding investors who had been patiently waiting through late October for the runup to take hold. Congratulations if that's you. But, if that was you, then now might be a great time to take the money and run with the trade, as GALE looks poised to make a sizeable pullback. More on that in a moment.

If the ticker GALE rings a bell, it might be because yours truly posted a conditionally-bullish outlook on the biotech stock back on November 11th. It was all but bullish. The only final condition I needed to see to deem the stock as trade-worthy was a move above the horizontal ceiling at $2.49. As it turns out, Galena Biopharma shares closed above that line the very next day (the 12th), which would have triggered any buy orders that had been on the fence up until that point. Sure enough, that move was the beginning of a good-sized rally, culminating in today's 10% surge.

It's easy to get excited about the rally now, and perhaps even jump on board. But, that would be a big mistake. In fact, now's the time to be getting off the Galena Biopharma Inc. train if you were lucky enough to heed my advice a couple of weeks ago.

I know what you're thinking - I'm crazy for getting off now. Just hear me out.

First and foremost, the sheer size of the gain from GALE over the past couple of weeks is inviting to a lot of would-be profit-takers. Rather than ride out a dip, it might be prudent to take what you can get while you can get it. If you're still a fan after a pullback, you can always step back into Galena Biopharma later, and at a much lower price to boot.

The second reason here and now is a good time to walk away with your gain on GALE is the fact that the stock is close to (though not right at) a couple of different possible resistance lines. One of them is the horizontal resistance line stemming from the early-2012 peak around $3.54. The other technical resistance line is the rising ceiling that tags the two major peaks we've seen this year. Granted, Galena Biopharma Inc. shares aren't quite there yet (the $3.54 area for both technical ceilings), but there's not enough distance between where we are now and there to merit risking staying in an overbought stock that could begin to struggle real soon.

For long-term fans and followers of GALE, don't worry - this is strictly a short-term call on the stock. After a good pullback, Galena is going to be buy-worthy again, as it's still in a broad uptrend fueled by rising support lines and a "two steps forward and one step back" pattern.

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