DNDN - Sector: Healthcare---Industry: Biotechnology & Drugs

[Melf Elf]

You might want to consider selling on a rally back to resistance, then re-enter at a better price.  Unless DNDN would get FDA approval, the chart doesn't look like its going anywhere for awhile.

Thus far, the "fast track approval rally" is having trouble at The Basonista Trendline.

[basonista]

Maybe I need to put a wammy on that trendline!

[Melf Elf]

Maybe I need to put a wammy on that trendline!

basonista,

I think you already did...that trendline has been giving us fits for a month!   

[ScottishTrader]

Well, I think that DNDN is readying itself to make another break, possibly by day's end - the intraday showes a nice symmetrical triangle formation, with a pre-breakout ascending trendline providing support.  Bollinger bands are narrowing and volume is decreasing, suggesting a move ius imminent.  Unfortunately I can't say whether it will break to the upside, but my suspicion is that it will, given recent news, and the fact that the shorts can't push it forever... at least that's what I thought.

DNDN should showw a true reflection ofo its potential very soon, am sure of it...

[Melf Elf]

You might want to consider selling on a rally back to resistance, then re-enter at a better price.  Unless DNDN would get FDA approval, the chart doesn't look like its going anywhere for awhile.

Thus far, the "fast track approval rally" is having trouble at The Basonista Trendline.

The November 7 "fast track approval rally" high of 6.22 at The Basonista Trendline still stands, one month later.  6.22 was re-tested on November 22, 23 and 25, but DNDN failed to get through it.

It's interesting to observe the interplay between the fundamentals (bullish "fast track approval status") and the technicals ("bear rally back to former support at The Basonista Trendline," which acted as resistance). 

Sometimes the fundamentals trump the technicals; at other times, it's the reverse.  In this case, the bearish technicals trumped the bullish fundamentals.

"It isn't the news that's important, but the market's reaction to the news that's important."

It's one of those "counter-intuitive" deals to have "sold into strength" on the bear rally back to The Basonista Trendline (resistance) to 6.22 on the "fast track approval" news, or even to have shorted that rally, but those often are good plays when "everyone" is buying a rally back to resistance (or buy, when "everyone" is selling into support).

Short-term, DNDN has double-topped at 6.22, and has taken out 5.60 support, putting a target of 4.98 IN PLAY.  It's  now testing horizontal support levels at 5.26-5.37.

Target: 4.98 is IN PLAY, as long as DNDN remains below 5.60.

Math:

Double Top at 6.22
Middle of the "M"-Top is 5.60.

6.22 - 5.60 = 0.62 points. 

5.60 - 0.62 points = Target 4.98 IN PLAY

[Melf Elf]

Target: 4.98 is IN PLAY, as long as DNDN remains below 5.60.

Math:

Double Top at 6.22
Middle of the "M"-Top is 5.60.

6.22 - 5.60 = 0.62 points. 

5.60 - 0.62 points = Target 4.98 IN PLAY

Looks like the 4.98 will be MADE at the open:

7:12am 12/07/05 
Dendreon prices 10M shares at $4.50 each (DNDN) By Thomas Middleton
NEW YORK (MarketWatch) -- Dendreon Corp. (DNDN) said Wednesday it priced its public offering of 10 million common shares at at $4.50 each. The Seattle biotechnology company said it expects to complete the sale Monday. The company also granted underwriters a 30-day option to buy 1.5 million additional shares at the same price. 

[ScottishTrader]

Nice call Melf Elf - there's your target done and dusted.  My only question (as I don't short stocks) is where do you think an appropriate long entry point might now be??  Of course it depends on how low this breakdown goes (presumably it won't drop much below 4.50), but it is amazing to see DNDN fall to these levels considering the fundamentals and all of our discussions of it the last couple of months.

But then again, as you say - the market always knows better!  Starting to think DNDN could be a very good long play at these levels.  Will wait for a new base or a turn around for sure though.

[Melf Elf]

My only question (as I don't short stocks) is where do you think an appropriate long entry point might now be?? 

Scotsman,

We've just gapped down below five months of trading, so unless we get some kind of powerful reversal to the upside, it looks like DNDN is going to have tough going.

it is amazing to see DNDN fall to these levels considering the fundamentals and all of our discussions of it the last couple of months.

This morning's news was the type of thing that you can't factor in, but the chart was acting bearish.  Bearish chart...bearish news...gap down.

But then again, as you say - the market always knows better!  Starting to think DNDN could be a very good long play at these levels.  Will wait for a new base or a turn around for sure though.

Right.

http://charts-d.quote.com:443/987073757410?User=demo&Pswd=demo&DataType=GIF&Symbol=NASDAQ:DNDN&Interval=D&Ht=400&Wd=600&Display=2&Study=MACD&Param1=12&Param2=26&Param3=9&FontSize=9

[Melf Elf]

The November 7 "fast track approval rally" high of 6.22 at The Basonista Trendline still stands, one month later.  6.22 was re-tested on November 22, 23 and 25, but DNDN failed to get through it.

Still watching DNDN.  Almost three months later, the November 7 "fast track approval rally" high of 6.22  stands, and we had another bearish pattern break to the downside last week. 

[7:12am 12/07/05
Dendreon prices 10M shares at $4.50 each (DNDN) By Thomas Middleton
NEW YORK (MarketWatch) -- Dendreon Corp. (DNDN) said Wednesday it priced its public offering of 10 million common shares at at $4.50 each. The Seattle biotechnology company said it expects to complete the sale Monday. The company also granted underwriters a 30-day option to buy 1.5 million additional shares at the same price.

That 4.50 area now is IN PLAY from last week's Symmetrical Triangle pattern break.  The May low was 4.31.  This chart would have a nice look to it if we could go down there and put in the right leg of a BIG "W"-Bottom .  The middle of the "W" would be the September 15 high of 7.37.  EDIT: The rally from the May low to the mid-Septermber high was 4½ months, so if we put in a right leg here at the end of January/early February, that also would be 4½ months.  Nice symmetry, if we get it.

DNDN continues to act bearish for now, though. 

[bigdogs99999]

Hey ... I am still in the DNDN game - I sold out last year hoping to buy in lower.  After the stock reacted surprisingly well to the secondary at $4.80 per share ... I bought in again and here the turd sinks again ....  The market did not like the recent news about firing folks supposedly as to realign resources to focus on the commercialization of its prostate cancer vaccine Provenge.  Also several high level executives have left.  For the first time, I am having some real doubts on the fundamental side on this stock.  But ... there is very recent insider buying of considerable amounts reported 19-Jan-06.
HERJAVEC, ROBERT (Senior Vice President   11,250   Direct Acquisition (Non Open Market) at $5.50 per share.   $61,875
HAMM, RICHARD F, JR Secretary   16,875   Direct   Acquisition (Non Open Market) at $5.50 per share.   $92,812
GOLD, MITCHELL Chief Executive Officer   56,250   Direct   Acquisition (Non Open Market) at $5.50 per share.   $309,375
URDAL, DAVID Director   15,000   Direct   Acquisition (Non Open Market) at $5.50 per share.   $82,500

[Melf Elf]

Bigdogs,

Thanks for your thoughts on the fundamentals and the Insider Trading info.  Applaud.

[bigdogs99999]

Turns out that it was not really insider buying!   

On January 19, 2006, Dendreon Corporation ("Dendreon" or the "Company") awarded restricted stock grants that had been previously approved by its Board of Directors to certain of the Company's executive officers, to be evidenced by a restricted stock award agreement in the form attached as Exhibit 10.46 hereto. Dr. Mitchell H. Gold, Dendreon's President and Chief Executive Officer, received a restricted stock award of 56,250 shares. Dr. David Urdal, Dendreon's Senior Vice President and Chief Scientific Officer received a restricted stock award of 15,000 shares. Richard F. Hamm, Jr., Dendreon's Senior Vice President, Corporate Development, General Counsel and Secretary received a restricted stock award of 16,875 shares. Dr. Robert M. Hershberg, Dendreon's Senior Vice President and Chief Medical Officer received a restricted stock award of 11,250 shares. Each of the restricted stock awards is subject to the executive's continued service with the Company and will vest 25% on the first anniversary of the grant date and then quarterly thereafter at a rate of 6.25% over a period of 36 months.

[Melf Elf]

Turns out that it was not really insider buying!   

On January 19, 2006, Dendreon Corporation ("Dendreon" or the "Company") awarded restricted stock grants that had been previously approved by its Board of Directors to certain of the Company's executive officers

bigdogs,

Okay, thanks for the clarification.  I assume that you will be making this addition to your sign off about "men and counterfeit money:"

"Men awarded restricted stock grants; in any more cases, grant that men are restricted from awarding stock!"

   

[Melf Elf]

Since we're revisiting DNDN, take a look at the "false buy signal" MACD gave at the high of the recent Symmetrical Triangle on December 23:

1. Notice the bullish divergence in MACD at the December low.

2. Notice the bullish crossover of the signal line in MACD at the exact top of the pattern!

3. Notice that after putting in three days of Bearish Hangmen on January 9, 10, and 11, MACD crossed above the zero line.  Some technicians use that as a "buy signal."  That signal was issued at the secondary top of the Symmetrical Triangle pattern.

4. MACD turned down from near zero (often a precursor of a downside continuation), and then MACD went back below its signal line, confirming the Symmetrical Triangle breakdown, three days prior.

Summary:

BE CAREFUL about "bullish divergences" and subsequent "buy signals" in indicators when stocks are in a bearish trend.  The same cautionary note applies to "bearish divergences" and subsequent "sell signals" in stocks that are in bullish trends. 

Evaluate the signal within the context of the price action/patterns in the chart.

[bigdogs99999]

bigdogs,

Okay, thanks for the clarification.  I assume that you will be making this addition to your sign off about "men and counterfeit money:"

"Men awarded restricted stock grants; in any more cases, grant that men are restricted from awarding stock!"

   

How about just - never trust any information received for free from Yahoo - and only trust some of the information in SCC filings?  I guess that is too true to be funny though