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Regarding your questions about yesterday's price action on the stock, I study a form of technical analysis called point and figure charting, which measures the level of supply and demand in a stock and projects price objectives. There have been posts on using this method before on this thread. To summarize, LGND has been under price pressure and in a downtrend since its high of 16.5 in March of 97. Since the low of 5.5 in August, 98, the stock has risen twice to 12, but has been driven back each time. Yesterday, when it hit 12 for the third time, it broke through to 12.5, giving a triple top buy signal. The stock does not have to hold the 12.5 level to validate the buy signal, as this method does not rely on closing prices, but intraday highs and lows in the stock. Based on the movement of the stock since the low, given the current breakout, the price objective on the stock is 25. The stock will be meeting resistance at 14, when it faces the downtrend resistance line, called the bearish resistance line, which is typically very strong historical trendline resistance for upward movement on a stock. If it is able to break through this point, it will revert to a positive trend. Resistance also lies ahead at old highs of 16.5 and 18.5. The ability of the stock to negotiate these areas of resistance will depend on the supply/demand level at that time. For those of you who are interested, point and figure analysis is an excellent, rational means of aiding in your evaluation of a stock's potential. Movement in a stock is 80% sector and market effect, 20% the fundamentals of the stock. There is a wonderful thread on SI, Market Trends: Point and Figure Charting and a great site www.dorseywright.com (which has a two week trial available), which are helpful, or, feel free to pm me if I can offer additional information. Let's please keep this site what it originally meant to be: a place where valuable information on LGND can be exchanged and personal attacks are not acceptable. |
