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Biotech / Medical : Ligand (LGND) Breakout!
LGND 190.43-0.7%3:59 PM EST
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To: Henry Niman who wrote (484)1/9/1997 8:28:00 AM
From: Henry Niman   of 32384
 
Although the same type of price movement happened last year, I may have been a bit too quick to call it profit taking. Yesterday's IBD showed LGND's relative strength rising to 89 and it's accumulation/distribution moving from "B" to "A". Today's IBD shows the relative strength falling to 78 and the stock is underlined to reflect the greater than 1 point drop. However, the accumualtion/distribution is "A"! There are a few obvious explanations for this apparent anolomoly. One is the accumualtion/distribution rating isn't updated daily and yesterday's move from "B" to "A" is reflecting earlier buying. The second reason for the "A" rating in today's issue is due to Tuesday's advance outstripping yesterday's decline and LGND was well into the "A" ranking and is now closer to "B", but hasn't crossed the boundary. The third is that there really was a fair amount of buying and the MMs were ratcheting the price down to pick up those who bought on dips or positioning the price for the big boys who are ready to buy at a lower price. It was hard to tell by looking at LGND's intraday chart, because each move was punctuated by so many 1000 share trades that it wasn't possible to distinguish between buyers and sellers (the spread was small and trades at the full bid and ask price were displayed). I think the MMs were positioning the price for those who missed the move up. Although an all time high is iffy this week, I think that the original prediction of an all time high (> 19 3/4) in January is right on the money.

Henry
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