Howard,
Agreed - volume is weak. But, that's ok so long as LGND is stuck in P2's triangle, under 14 3/4. Once 15 1/4 is exceeded, the volume should pick up, and then surge above 16.
Taking into account the size of this thread, the LGND story is not exactly a secret. There may be a lot of stock in firm hands. That may help explain that nasty October - January selloff. Trying hard to shake off any loose holders. This thesis is supported by the 2 upside gaps that have held so far. Also, the tape reading from last Friday indicates lots of buyers lurking at the 14-gap. Personally, I have been unable to re-fill my LGND basket since taking 1/2 profits near 16 last week.
I've seen really explosive stocks before, that sat very quietly in a little neutral zone, before taking off. They lull one into thinking that one has plenty of time to accumulate at a good price. Then after the explosion, it is hard to pay up. LGND's recent behavior suggests it may be one of those sleepers. Remember the 1st time Upjohn took off - maybe 1991? There were many many gaps during the 9 month run. Gap on high volume... quiet down with no give-back on price... then crawl upward on light volume until another gap. I never could climb aboard that one once it took off, and I sold out on the 1st gap.
That idea 'fear of being out' of course in the general market signals a top in formation. But it only has use after a long rally. - like LGND last October. The volume slowed at the top. Holders were convinced it was going to 20 - were unwilling to part with stock on downticks. Outsiders were unwilling to make an entry on upticks at highs. Result was as always a standoff - and when no new fundamentals were forthcoming - the pullback.
-Coming off a bottom, the 'fear of being out' shows up as low volume - and then explosions. Like me, with Wednesday now past, I may have to pay up for the remaining LGND shares I want.
Sorry - talk about long-winded.
Later,
Herbert |
