Hi all, SamanthaStephens started a thread about NFLD on the options board, and I saw theere was no thread on it in stock picking so I thought I would start one to keep discussion of stocks and options strategies separate.
Northfield Laboratories Inc. (NFLD)
Northfield Laboratories, Inc., a development stage company, engages in the research, development, testing, manufacture, marketing, and distribution of hemoglobin-based blood substitute products. It primarily develops PolyHeme, a human hemoglobin-based oxygen-carrying red blood cell substitute for the treatment of life-threatening blood loss when an oxygen-carrying fluid is required and red blood cells are not available. The company was founded in 1985 and is headquartered in Evanston, Illinois.
Market Cap: 348M
OS Shares: 26.78M
Earnings: insignificant
2005 Net income: -26.77M, EPS: -1.07
Hmm... development stage biopharma, financial poo, probably needs a bit more digging to get any real idea on the fundamentals
I'll re-post what I said to samantha on the other thread:
The 1 year daily chart is pretty interesting really, and you can see that since April, NFLD has developed a pretty wide ascending channel, with sharp rallies and slightly more orderly pullbacks to support. The rallies have been real rippers, but surprising have not been combined with massively increased volume. The pullbacks have generally formed falling wedges which have consolidated and then broke to the upside. NFLD jsut broke out of one of those last week. Things to note: the CCI does a fairly good job of tagging those reversals and we just got one when it went back down to 12. There seems to be definite resistance at 13.50 which it will have to get through to continue its bullish charge. However, unless things go real bad and we get a channel breakdown, I don't see it going below $12 in the next month or two.
The 3 year weekly chart puts all this into context. We can see that there is significant resistance just over $15 which was the recent high in October. It will need a LOT of oomph to get through that, but if it does it is in real breakout territory. I am not sure how it will react when it gets to this level, but right now I am fairly confident that it should retest this level in the near future, now that it has pulled back and tested the channel. Also there is a trendline from the symmetrical trinagle breakdown in 2005 which looks valid as coninuing resistance on this weekly chat. The price broke through this level this week, but subsequently sold of and cclosed the week right on this level. I would think a failure at $13 may push it back down to channel support.
Personally, I like the chart, I like the channel formation (but we really don't know how long the channel will stay valid) and I think a buy as close to 12.50 as possible would be a pretty safe trade, with a stop just below $12. I would like it a whole lot better if it then went on one of its tears and took out $15 resistance.
OK a little more info:
Northfield Nears FDA Filing
http://www.thestreet.com/_yahoo/newsanalysis/pharmaceuticals/10314377.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA
Looks like their artificial blood product PolyHeme (potentially revolutionary approach to dealing with rapid blood loss when blood stocks are not available) is nearing approval and release to market. However, as the article mentions, NFLD was incorporated in 1985, and has never sold a product, and in that time has racked up total operating losses of $180M. Thats a long time and a lot of money. This product better be a blockbuster!!
Another interesting, if not fairly self-evident article:
Waiting on Northfield
http://biz.yahoo.com/fool/061011/116058170204.html?.v=2
So, if (and it is still an if) their phase III results are good, it is highly likely that they will dump a fair number of shares on the market on any jump. Currently they have (as of last ER) 58.3M in cash and are burning $7.6M as of last Q. So they are good for a bit longer, but as the article notes, if the results are good enough to suggest the FDA will approve PolyHeme, they are gonna need a significant chunk for manufacturing buildout.
The previous Q's report is also of interest:
http://biz.yahoo.com/bw/061010/20061010006348.html?.v=1
Finally, a recent update:
http://biz.yahoo.com/bw/061108/20061108005097.html?.v=1
It seems that they are anticipating release of these Phase III results very soon (they had been quoted as saying "sometime in the fall") Right now they have not "locked the database" (whatever that means) so data analysis has not begun.
PolyHeme does indeed seem to be potentially revolutionary, especially within military operations/emergency medicine. I need to read some mor about the specifics of it, but so far I like what I have seen. I suppose the risky strategy on this one would be to trade it technically, but you would always run the risk of them releasing poor PIII results which will gap and kill the stock, especially as they have onothing else in their pipeline. The alternative would be to wait for the results and buy into the almost inevitable secondary whihc will pull the share price back some.
Hmm... I think I need to think a little about this one. Anyone else have any thoughts?
Hi ST!
Thanks for all your help and insight on this pesky stock!!!!
I have a quick question for you about the lines you've drawn. Only because I'm new to the whole line drawing stuffs... ???
I would think that the weekly to daily lines should stay consistent, but your examples change. Why and when do I need to change those when i do my analysis?
I KNOW YOU'RE RIGHT. I just need to know how to adapt.
Below is my weekly chart which seems more consistent with you daily chart.
Guide me Landrew!
-Samantha
(//)
Hi Samantha,
it is true that trendlines that come up on a daily chart should also be found on a weekly chart, provided that they are major patterns. The problem is that because I use stockcharts, the trendlines you draw aren't preserved when you change scale, which means you re-draw them and sometimes forget/overlook lines that were obvious before, but your attention now becomes focused on different patterns. Weekly timescales are useful for giving an indication of the major trend/pattern of a stock, and identifying major support/resistance. If you were willing to hold stocks longer term you could also trade pattern breakouts on the weekly scale, and there is no doubt that a pattern breakout on a weekly scale should signal a major move.
With NFLD I suppose I simply didn't see that the move from the $24 highs was also under a descending trendline (making a falling wedge), another problem with the falling wedge is that the first reaction pierced the lower trendline drawn from subsequent points. Melf Elf is pretty strict about tops and bottoms in patterns, but I tend to give them a bit more leeway, especially on a weekly chart if shadows fall a bit outside the chart lines. However, closes outside of a pattern hould generally be considered to be more significant. Another thing to remember (which sometimes I forget) is that a trendline is only valid when you have at least 3 exact hits on it. if you only have 2, this could be anything - i.e. you can always draw a line between 2 points, but if you get a third exact tag of that line, it suggests "hey this is support/resistance". Another tag and you know it must be significant.
Personally I think charting is a little bit of an artform, and some people here (such as Melf Elf) are much more exact about it than me. Others simply use chart patterns as guidance to get a btter idea about the general shape of a trend. But it is always nice to see a stock react exactly off a trendline that confirms your own intuitions about it.
Anyway, hope that helps!
Wow - all I can say is what a day for NFLD!!! Man I'm regretting not picking this one up yesterday as soon as I saw it - its a ripper!! NFLD was looking like it was gonna get stumped at 14.90 this morning but then out of nowhere, just blew right through $15 and was off to the races, rallying as high as 16.36 to make a perfect tag of the ascending channel. Now I hope that doesn't signal a reversal and pullback to the bottom of the channel as I just had to buy some, averaging in at 15.28. I really like the look of this one too, and from what samantha says about the options volatilty there is some heavy speculation that this is going a LOT higher. It all comes down to those PIII results, but until then, I like the speculation! Looking for it to retest the top of the channel shortly... and maybe more???
Hi Scottish,
I appreciate the charts things are looking good for NFLD. I have been invested almost 3 years. The company will sink or Swim on the merits of the science. So far everything looks good and we believe the product is a lot safer than blood. The WSJ did a hatchet job on the company and product in 3/2006, but the doctors involved and FDA felt the results of the ANH trial were due to fluid overload. Now several trials later PH has been infused in over 600 people no evidence of any SAE's (Severe adverse effects). The anecdotal data has been overwhelmingly favorable, doctors, EMT's have had glowing reviews about Polyheme. Dr. Moore was the lead investigator and considered the Godfather of trauma surgery. ABC's 20/20 did a negative piece on the trial and non consent issue. Dr. Moore comes right out and claims that Polyheme is better than blood. I think you stumbled on something the Medical community calls the Holy Grail of medicine and will be a huge blockbuster of a stock and save thousands of lives. If you have questions visit us at the Investor Village board where the company and product is talked about day and night. http://www1.investorvillage.com/smbd.asp?mb=1666&pt=m
Here is a few reasons why I see eventual approval
1. Previous trial data (People lost all there blood and kept alive on just circulating Polyheme the results were amazing)
2. Four positive interim looks / Power, futility test (current trial)
3. Dr. Moore on 20/20 http://grouper.com/video/MediaDetails.aspx?id=1030473&ml=fi%3d%26fu%3d374766&
4. Polyheme on Fast Money http://grouper.com/video/MediaDetails.aspx?id=673599&ml=fi%3d%26fu%3d374766&
5. No negative leaks during the trial and many positives stories
6. Paramedics praising Polyheme http://www.kykernel.com/media/storage/paper305/news/2006/01/17/CampusNews/Paramedics.Praising.Polyheme-1370753.shtml?norewrite200611051117&sourcedomain=www.kykernel.com
7. Patients saved by Polyheme in current trial
Hiliary Williams
http://www.usatoday.com/news/health/2006-06-13-traumas-trials_x.htm
Jan Dalton ,
http://transcripts.cnn.com/TRANSCRIPTS/0603/13/lt.02.html
Erik Silkworth
http://www.jems.com/news/102402/
8. Numerous Medical professionals that post on this and the old YMB that are directly or indirectly involved in the trials have been positive.
Good luck
thanks for the info - I will have a look over it asap....
NFLD made a spike re-test of the $15 area on Friday, but immediately rallied, and looked to be holding in a descending triangle pullback from Wednesday's breakout. However, right befroe the markets closed (last 15 mins) it broke out of this to the upside on the strongest 5 min volume ticks seen all day. Suggests to me that there should be some continuation this week. Right now I think that $15 should probably hold, but it has been running up fast, so there may be some volatile action at these levels. For now I am maintaining my stop of 14.46 and will look to raise it if we get another $15 test or a move above $16. 15.35 looked to be good support on the intraday chart, and we have the October high of 15.27 just below this. Intraday chart below:
NFLD fell out of bed in after hours trading when it was announced that 46 of their patients died compared to 35 on the "standard treatment".
They are saying it's preliminary ... not significant...but this just breaks my heart. OK ... posted my "save the world monologue" in the options folder.
Now what?
-Sam
reversed my short position at 4.29
NOW I'M LONG
i think bottom should be bet 4.15/4.20....
ANY GUESS???
It looks to me like the options are still suggesting more down time. If you check out the January options ... puts are out numbering the calls and the volatility to the downside is higher than to the upside. It might just be a matter of letting the options settle out after the fall ... but I think I'd stay away until you get a good chart or candle formation to really suggest a turnaround. Looks alot like a falling knife to me right know...
Good luck!
-Samantha
up in pre market
Agreed. it does look like it may have formed a short term bottome, bu if there is a rally, it might just be a weak relief rally, so would probably only be worth flipping quickly. As I see it, there are 2 descedning trendlines coming off the top of the gap on the intraday chart. One was broken yesterday, and then NFLD went into a horizontal holding pattern for the rest of the day between 4.05 and 4.18. The other is still coming down and looks like it ended yesterday at around 4.30.
It could be worth a relief play if it breaks above 4.18, provided you set your stop below yesterdays 4.05 low, giving a reasonable risk of 3.5-4%. But the problem is, I just don't like the idea of holding a stock like NFLD for any length of time right now, unless it shows some kind of strong rebound behaviour.
Good luck if you choose to play it, I might too, the risk:reward, technically is appealing.
ST - Fab advice... ::)
Just a technical question for you - - when you look at this in a couple days/weeks ... long term (daily), would you draw resistance from top of the candle that broke down (pre fall) or would you start drawing resistance at the top of the post fall candle. Either way, I'm assuming you're minding the gap... it's the severity of the resistance downward angle that I'd like to know how you chart... What do you do...? On really digger resistance lines, I worry that I'm reading too much into a "bounce" off the resistance.... When I draw my lines less severe, I like to think it's signaling consolidation with a bounce/fall ... how do you read the tea leaves??
My only thought is that the major trend is still down. The daily candles are still down ... and even though it tried a "rally" of sorts today the range is still pretty tight. Today the close and open were pretty close , but the wicks are short... so I'm not sure that really makes a convincing doji star (yes ... I can do more than read option taro cards... and be blond... all at the same time ;) )
I think that if I were to play with this stock, I would want a daily chart turnaround. Most will say that would be too late of a confirmation. The options have leveled out - though they are still high from now until Jan09 - no skew to report anymore... which either says no news .. or nowbody cares ... and both are bad if you're trading and want the stock to move. I don't know what the natural level of the options should be ... so I can't suggest buying the options either. If the stock settles into a "pattern" the volatility will get sucked out. SO ... I have to fall back on why this stock was interesting to me in the first place... The options told me that this would move a good $3+ in one direction or the other ... that has happened, and I don't know of any new "news" that will correct such a "great" fall... The option/catalyst/news is gone ... for me.
I still love the story on this stock. But I'm just not sure how they can quantify/qualify their death results when their PIII trial was on varying levels of allready dying trauma patients. Seems like a strange luck of the draw test sample to me ... that at the very least would imply a revised test plan for approval. Which may take a while... COURSE ... you never know ... tomorrow they could come out with some news that reverses the impression from the pIII study ... maybe they'll be able to say that though they lost more people, the people that lived weren't veggies compared to the saline "standard". Seems like a plausible rebuttal. But I think that's putting a bit too much faith/hope etc into the trade for my liking...
Please don't get me wrong. I love this product's concept ... it's vitally important "stuff" ... I just think the lack of control in their test has really made this a hard stock to back with $ ... again ... though I love the concept.
I just don't think I could touch this yet ... course I have commitment issues. hahahahahahaha ....
-Samantha
Hi Samantha,
No time to write just now (its christmas after all...), but thought I would just say that I picked up some at 4.10, just to see what would happen. As I mentioned, I'm riding a fairly tight stop a little below $4. Friday didn't give us the bounce I was looking for, but th doji is encouraging, and I think it has the potential to drift up on light volume next week. My guess is that most sellers will have sold in that 2 day downtrend. But I wouldn't bet the house on it and I'm not willing to give it much room.
I think we would see resistance at the low of the first candle, at 4.75, but it has to reverse from this little doji first, giving us confirmation. A more prudent strategy would be to buy a break above friday's high of 4.27, if it looks like it wants to go higher, it might be good for 10% or so. It could even rally to near $6, but I would expect it to be a number of months (barrring significant good news) before it sees anything above that.
let's see what happend today
AP
Northfield Labs Says SEC Probe Is Over
Wednesday August 22, 5:41 pm ET
Northfield Labs Says SEC Completed Probe of Company Without Enforcement Action
EVANSTON, Ill. (AP) -- Northfield Laboratories Inc. said Wednesday the Securities and Exchange Commission completed its investigation of the development stage company and does not plan to recommend enforcement action.
The Evanston, Ill.-based company received an informal request to voluntarily provide information to the SEC on the development of its PolyHeme blood substitute product, the company said in March 2006.
"We are pleased with the outcome of the SEC's investigation," Dr. Steven A. Gould, who is chief executive, said in a phone interview.
Northfield develops PolyHeme, a late-stage clinical trial blood substitute.
The SEC investigation announcement in 2006 came after The Wall Street Journal in February last year reported the results of a PolyHeme study, which Northfield hadn't disclosed. The study showed there were 10 heart attacks -- including two patients who died -- among 81 surgical patients who received PolyHeme, according to the Journal.
Excellent!
with the news now maybe it can make a run at filling the gap.
Back above the 50-day MA...13-day MA has crossed over the 50-day MA
52wk Range: 1.00 - 17.94
Volume: 1,103,361
Avg Vol (3m): 356,261
Technicals
Close Above the 50-day MA
Percentage Gainer
Last Price Quote is:
22.80%above 13-day MA
10.91%above 50-day MA
RS Rating: 87
Fundamentals
Earnings Expected on Aug 31
Key Data:
Market Cap (M): $44.68
P/E Ratio: NA
PEG Ratio: N/A
Next Earnings: 10/09/2007
Last Analyst Rating: Neutral
Now that is "Bloody Marvelous!!" :D :D ;D ;)
52wk Range: 1.00 - 17.94
Volume: 7,949,755
Avg Vol (3m): 448,177
Technicals
Most Actives
Percentage Gainer
Last Price Quote is:
96.04%above 13-day MA
77.05%above 50-day MA
RS Rating: 98
Fundamentals
Key Data:
Market Cap (M): $44.68
P/E Ratio: NA
PEG Ratio: N/A
Next Earnings: 10/09/2007
Last Analyst Rating: Neutral
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