Re: CNTO
I've had more time to look at CNTO and read about retracements. I'm a student, so I'm hoping that by sharing my reading with you we can both gain.
I think I was in error to think only in terms of the trading range 23-41 during the years 11/96-9/97. According to DeMark(The New Science of Technical Analysis), I should have gone back to the previous time the stock traded at the same high, 1/92, and then look for the lowest low in the ensuing period (5.04). the difference between 5.04 and the high(53.8) determines the fibronacci retracement percentages. The expected percentages are to drop to 61.8%(35.17) of the difference between the high and the low, and if it passes this, to the 33.8%(23.67) level. Since the price gapped throgh the .618 level on 12/17/97, we may be able to consider shorting this one to the .338 level, or to 23.67. If it breaks through 23.67, it could go to the magnet price of 6.625. Interesting stuff, huh?
From a fundamental side, its interesting that 12/17 is the day that many downgrades were released and it was disclosed that "Avakine, designed to treat Crohn"s disease and rheumatoid arthritis, increases the likelihood of contracting lymphoma, a type of cancer".
"Hambrecht & Quist on Wednesday said it cut its rating on shares of Centocor Inc to hold from buy and its fourth quarter estimate to $0.02 a share from $0.32 a share." If your earnings are going to .02 from .32, are you going to hold or sell?
So, from this point of view, CNTO looks like a great short.
I'd be interested in your response, or anyone with more expertise lurking out there is encouraged to jump in :'>
BTW, what screen did you use to find this one?
Ocote |
