Pernix Therapeutics was a dog in 2015, dropping 70% in 2015. The company announced disappointing sales guidance and a large debt offering in April which helped fuel a 9 month selloff.

From a technical perspective, shares of Pernix Therapeutics look ready to run going into 2016. The stock experienced heavy accumulation in December, MACD and RSI are rising, and the stock is currently pushing up against its 50 day MA. With the 200 day MA currently 75% above Friday's closing price of $2.95, there is plenty of room to run if the stock breaks above its 50 day MA.

If Pernix breaks above falling wedge resistance/its 50 day MA, the stock should drift towards $4.00 resistance, representing 35% upside from current levels. If strength continues and the stock breaks above $4.00, the 200 day MA near $5.00 would be the next target.

Looking even farther out, there is a $1.00 gap to be filled from $9.00 to $10.00. That's a long term target. Seriously positive news flow would be required for demand to outstrip supply and PTX stock to fill that $1.00 gap. From current levels, $10.00 represents 238% upside.

For a quick trade, set a stop loss at $2.60. Risking 12% to potentially gain anywhere from 35% to 238% represents an attractive risk/reward profile.

Keep an eye on Pernix Therapeutics going into 2016. This technical analysis completely leaves out the fundamentals, so more DD is required if taking a long term position.