Good day all. Markets are playing a good old fashioned game of bull and bear today with the bulls getting the nod for winning the battle right now. I still wouldn't get too overly excited but today's mid-day move is most definitely something the long side of the market can build on. For now though, we're still going to stand pat that the short-term pops are nothing but an opportunity to position for a move lower. What we have found very interesting over the last few weeks is the biotech sector has been quietly outperforming the rest of the market, so we went on the hunt for a few attractive biotechs and came up with two new ideas worth serious consideration. Usually, when a particular sector gets hot, it lifts the sentiment for just about everything in the space. And, when that space is biotech, it can often become an exciting ticket on Mr. Toad's Wild Ride. We identified two small cap biotechs that are looking very attractive technically. Both are well capitalized, very deep in their R&D lifecycles and not too much debt to speak of. I'll give you a short overview of the companies here and a technical look at both since we'll be making them Featured Stocks at the close today should you choose to start digging deeper and learn more about either play. Vermillion, Inc. - Socially Responsible When I came across VRML, it hit a nerve with me. About 17 years ago, I was the VP of Sales & Marketing for a local Advertising Firm here in San Diego. My top sales rep. was an amazing women only 34 years of age. She was as dynamic, loyal and committed as any employee I've ever had. Over the course of a one month period she started not feeling well and feeling as though something was terribly wrong. Two short months later she passed away of ovarian cancer. Her death was such a horrible shock and so unexpected that over the course of the next few months I contemplated my own future, ended up leaving the firm and that's how I got into the business I'm in today. Ovarian cancer as many of you know unexpectedly kills many women every year. Vermillion, Inc. is focused on the discovery, development and commercialization of novel high-value diagnostic tests which can better diagnose, monitor and treat diseases. Vermillion, along with its prestigious scientific collaborators, has programs in oncology, hematology, cardiology and women's health. The Company's flagship technology is their ovarian cancer program, which is directed at developing and commercializing novel high-value diagnostic tests that ultimately could lead to better patient outcomes through appropriate triage, earlier diagnosis, and optimal therapeutic selection. In March, 2010, Vermillion launched OVA1®, the first blood test cleared by the U.S. Food & Drug Administration (FDA) for the evaluation of an ovarian adnexal mass prior to a planned surgery. OVA1 utilizes a panel of five biomarkers that may help identify women with cancer so they can be referred directly to a gynecologic oncologist for their initial surgery. OVA1 helps a physician evaluate the likelihood that a woman's ovarian mass is malignant or benign prior to a planned surgery. Vermillion is evaluating and validating biomarkers that may expand their ability to enter into other diagnostic arenas in the field of ovarian cancer. The Company is also developing VASCLIR® in collaboration with Stanford University to aid physicians in the diagnosis of PAD (Peripheral Arterial Disease), which is a disorder affecting approximately 12 million Americans and that is under-diagnosed and under-treated. The Company recently announced it has received a notice of allowance from the United States Patent and Trademark Office for a patent, "Biomarkers for Ovarian Cancer." The patent makes claims in the uses of a urinary Small MBL-associated protein C-terminal fragment (sMAP) in the diagnosis of ovarian cancer, ovarian cancer monitoring, and patient management. Companies like this are perfect takeout targets for large pharma, especially these days with many of their patents expiring, they're looking for good solid small companies to add to their portfolios that offer value based on their existing stock price and technology potential for their pipelines. Shares of VRML have been starting to garner a fair amount of interest of late. I've included a daily chart for your review. What you can't see here in the chart is that VRML at one point back in March of 2010 was as high as $30 bucks per share. The stock has since tailed off to its current trading range of just over $2 per share. I think it's safe to assume we'd much rather take a shot with the stock here around $2 bucks than at its high of $30. Shares of VRML have been very volatile with higher than normal volume ever since the middle of March but continues to make higher lows in the process. Also, notice the trend line I've included here? The stock continues to gravitate back to the trend line before heading higher. Since we've let the dust settle on some of its biggest runs of late, we think now may be a good time to take a shot while still minimizing as much risk as possible. If you want to dig further into what VRML is all about, SCN Contributors and Members will likely start chiming in at the site in the coming weeks ahead. You can view everything written on VRML at the SCN site by going here: http://www.smallcapnetwork.com/Vermillion-Inc/s/quote/p/s/VRML/. DSCO - Dancing to the Biotech Beat The second of our biotech duo is DSCO. Discovery Labs is a specialty biotechnology company with one focused goal - to advance a new standard in respiratory critical care by creating life-saving products for patients with respiratory disease. The Company is aimed at improving the lives of patients with respiratory disease and creating value for their shareholders through innovation that contributes to the long-term growth of their business. DSCO has had its challenges to say the least but this small cap biotech name is starting to get some big-time attention from the media, which could fan the young flames of the recent strength displayed in the stock. There's no specific news that's driven DSCO slightly upward since the beginning of April. There's been a lot of positive buzz, but nothing specific from the company. Yet, shares of DSCO have managed to climb their way back above the the key 3X3 DMA over the last four days now and if this stock is going to make a charge, it looks like now may be the time. The volume support has been fairly strong with its recent trend reversal and that in itself is a nice clue for investors and traders looking to catch a run before its too late. Discovery Laboratories has developed a drug called Surfaxin, which has shown efficacy as a treatment for several indications. It's already been approved by the FDA as a therapy for respiratory distress syndrome, and is in trials as a treatment for more acute cases of the same. It's also working with the FDA and the EU's medical oversight agency to launch Afectair - an aerosol drug delivery system that could be used for several drugs (though and RDS drug has been the focal point so far). It's slated to be unveiled as a Class I, exempt medical device in the United States and Europe in 2012, with more markets in the works. To date, DSCO has logged no sales, as there has been no product to sell. That's going to change this year though, as Surfaxin is on the way for sure, and Afectair may be launched as well. Still, timing is a big part of playing in the biotech space, as the people who bought into Discovery Laboratories in early March can tell you. These traders stepped in right in the middle of all of the potential approval and product launch hype, right after DSCO had rallied from $2.20 in late January to a peak of higher than $5.00 on March 7th. Four weeks later, the stock was back at lows around $2.40, wiping away a great deal of the dollars that were poured in just a month earlier. However, shares of DSCO now offer a much nice risk/reward entry level inm the event the stock wants to make another run for higher levels. Today's new buyers are stepping in on the same news and potential that drew so many others in six weeks ago, only today's buyers are paying half the price. Although still a pretty speculative play here, Discovery Laboratories' market cap is a mere $114 million, while the RDS market is a $1.8 billion opportunity. Even a small sliver of that pie could put shares of DSCO at much higher levels than it's trading at now. If you want to read more about DSCO and what other SCN Members have to say, check out DSCO's Hub at our site located here: http://www.smallcapnetwork.com/Discovery-Laboratories-Inc/s/quote/p/s/DSCO/. As always, use protective stops but as it stands right now, it appears at least one of the two at the very least appear to be ready to make a pretty convincing move. When you catch the right small cap biotech at the right time, the returns can be pretty juicy. Your questions, comments and suggestions are ALWAYS welcome. Happy Investing.