Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Biotech / Medical : Biotech - Technical Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Jibacoa who wrote (77)	7/23/2001 6:51:52 PM
From: Jibacoa	Read Replies (1) \| Respond to of 544

Some comments about "Risk of Investing" by J.Frankel on the Biotech Valuation Thread. <<Risks of investing - OT - My views...J.F. >> <<To see how risky things get - you don't have to look any further than NBIX. On 1/29/01 it was 35, in six weeks it dropped to 15 and now 10 weeks later it is 36. So much for efficient market theory. NOTHING DURING THAT PERIOD CHANGED that would account for the decline and bounce back.>> Take a look at the NBIX chart. You will see that at the last week of September H (46), it failed on its attempt to go above its March 2000 H (47.50) and its November H at 44.87 was also below the Sept H. This was followed by the short term average,the green line on the chart, crossing under the longer or red line and attempts to rally on the last week of December, mid-January and first week of February failed making a “triple-top” at the 36.5 level. This completed what the Chart People call a “head and shoulders pattern” and made NBIX continue its steep decline to its March low at the 14.25 level, almost reaching its March 2000 L of 13.93.There it found support and you can see the price (blue bars) going over the short term average and later (at the 20 level) the short term average crossing over the longer term, confirming the near-term up-trend: siliconinvestor.com Of course you could see an earlier confirmation at the daily chart.<g> You can also notice that there was an “up-gap” on May 21 (It opened at 34.82 and the L for the day was 34,above the closing of 31.42 on the previous trading day of May 18 and the H that day of 32.27 as well as the H of May 17 of 32.80) The stock may have closed that “gap” on June 12 with its intra-day L of 31.52 but there is where the nearest “support level” now stands.<g> It seems it has now closed the other small “up-gap” of June 18 and the “resistance is now from the 46 to the 47.7 level. siliconinvestor.com <<Without conviction, how can you buy when a stock has dropped 50%, 60% or 80%? NBIX is hard for me. I probably understand the science stuff as well as most lawyers or accountants - but that is not good enough for making the investment decision.>> Fundamentals are very important, but to achieve higher returns look at points when the stock seems to be bouncing back from an important support level and the price crosses the short term average line. Also higher returns can usually be made when the price is below $20, or even lower. <g> (Take a look at ASTM chart). Of course it probably will close today’s up-gap, but today’s 17.65% move to the upside under the present market’s condition was nice.<g> siliconinvestor.com In the case of NBIX the stock has had a 100% appreciation in 3 months. since the March Ls. To get another 100% from present levels it would have to trade in the high 70s. <<The successful biotech investor should obtain an M.D. or preferably a PhD? Perhaps we should also have post doctoral work as well? An MBA would be helpful in understanding the business issues and a law degree would help with the IP patent suits. It would also be helpful if one had a spare 30 hours per week to devote to keeping up on the stocks being followed.>> All of that is helpful, but looking at how the stock price is doing from a “technical" stand-point I think is very important also and learning some essentials of T.A. can’t hurt.<g> <<I have been investing for close to 35 years (started at 15) and it is always challenging. I have made all the mistakes - some more than once. <g>> I started a little older, but have been at it a little longer.<g>(My first early “test” was at the time of Ike’s H.A., and since then have gone through the “missile crisis”, J.K.F.’s assassination and a few “bull” and “bear” markets in the 60s, 70s the 90s “bubble” and 00s “burst”.) It has been challenging, but to me fun and exciting as well as profitable. I have made my share of mistakes, but have tried to avoid making the same one more than twice.<g> It has helped that I no longer need to trade on margin and that I have cut way down on options and commodity trading.<g> Some of the advantages of taking T.A. in consideration as well as some important advice from the old timers that is always good to remember and try to not forget: W.B.’s rule #1 about stock market investing: TRY NOT TO LOOSE MONEY. Some corollaries from that are: CUT YOUR LOSSES SHORT AND LET YOUR PROFITS RUN. Also: “TRY TO PICK WELL YOUR ENTRY POINT, THAT WAY YOU SHOULD BE ABLE TO CUT YOUR LOSS TO NO MORE THAN 10% AND IF YOU ARE RIGHT YOU WILL BE ABLE TO HOLD YOUR POSITION WITH LITTLE RISK”. Remember that the casinos make money because they have the odds on their favor and they don’t let professional “card counters” play at black-jack because they may turn the odds to their favor. When investing on stocks if you pick well your entry point you increase the odds to your favor, that is where “charts” and TA are most helpful. “THE THING TO DETERMINE IS THE SPECULATIVE LINE OF LEAST RESISTANCE. YOU SHOULD ALWAYS WAIT FOR THE MOMENT WHEN THAT LINE DEFINES ITSELF.” “NO DIAGNOSIS NO PROGNOSIS; NO PROGNOSIS NO PROFIT”. . From Jesse: “I ALWAYS MADE MONEY WHEN I WAS SURE I WAS RIGHT BEFORE I BEGAN”.”WHEN YOU ARE NOT SURE IT IS BEST TO WATCH AND KEEP YOUR MONEY SAFE”. And also from Jesse: “IN ORDER TO BE RIGHT YOU HAVE TO STOP BEING WRONG”. “NEVER ARGUE WITH THE TAPE”. “ “OF ALL SPECULATIVE BLUNDERS THERE ARE FEW GREATER THAN TRYING TO AVERAGE A LOOSING GAME. ALWAYS SELL WHAT SHOWS YOU A LOSS AND KEEP WHAT SHOWS YOU A PROFIT”. “NOT TAKING THE LOSS IS WHAT DOES THE DAMAGE TO THE POCKETBOOK AND TO THE SOUL”. Also from Jesse:”TO BUY ON A RISING MARKET IS THE MOST CONFORTABLE WAY OF BUYING STOCKS”. “TRY TO THINK MORE OF BASIC CONDITIONS THAN OF INDIVIDUAL STOCKS”. “IT IS NOT GOOD TO BUY STOCKS WHEN THEY ARE OUT OF SEASON”. From Jesse:” WITHOUT FAITH IN ITS OWN JUDGEMENT NO MAN CAN GO FAR IN THIS GAME”. “NOBODY CAN GIVE ME A TIP OR A SERIES OF TIPS THAT WILL MAKE MORE MONEY FOR ME THAN MY OWN JUDGEMENT.” “IF A MAN DIDN’T MAKE MISTAKES HE WOULD OWN THE WORLD IN A MONTH BUT IF HE DIDN’T PROFIT BY HIS MISTAKES HE WOULDN’T OWN A BLESSED THING”. There are a few more that is good to remember but I guess that’s enough for today. <g> Bernard