Amylin (AMLN), the maker of the diabetis drug Byetta, is set for a nice run up. Analysts are forecasting better than expected sales for Byetta and the stock recently withstood a secondary price offering.

I owned this stock last year at around 18 and traded in and out until 40. In doing so, I missed quite a bit of the up move. It is always a challenge when a biotech company has negative earnings, to decide whether it is overvalued or an opportunity. This seems to be a case of both, hence my ambiguity. Now, stocks that show ambiguity are the ones that tend to move up. Short-sellers or naysayers tend to drive the stock down, only to see more converts jumping on board, driving the price up, which in turn triggers a wave of panic short-covering, which of course drives a stock up more.

Currently at an all-time high, I think Amylin is a good stock to own with plenty of upside. Be cautioned though that this stock is not for the faint hearted. Volatility is its middle name and any lack of positive news will take it down 10-15% in a flash. However, my long term target remains bullish with an expected gain of 30-40% over the next 6 months.