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

[imvirginot]

TRUNK, You must have misunderstood, the limit loss order is good throughout the day, if the stock falls to any predetermined level it will trigger the sell.
virg

[Michael]

What a great end of an otherwise mixed week. 3SOF is holding VPHM again 

I am off for a week to Mozambique (Thinking about moving there so we will be lookiing for a house)

I will be off line during the week but I am holding the following stocks (without any stop loss!):

VPHM
CRYP
XING
AOB
NLG.TO
ESO.TO
DNDN
DHB
RANGE
BNT

NLG.TO will release their earning figures on Monday and AOB might also release fugures next week. RANGE might release their 20F. All in all an exciting week ahead, so I am really excited to come back and see how the stocks performed!

Good luck to everybody and especially David. You are missed!

[jlong]

I'm glad I saw the 3stocksonfire post on the yahoo message board. I was about in panic mode. (finger hovering over the sell button). Should have sold before earning at $13.
and bought it back today. It looks like you hit support about to the penny. Picked up another hundred at $9.84. Just want to say thanks.

[Tirebldr]

1-Aug-05   Lazard Freres   Initiated      Buy
8-Mar-05   Piper Jaffray   Initiated      Outperform

Can someone explain the macd on this chart? Is it simply displaying a pullback?

And could someone explain the ADX chart also please. The DI -&+ are both crossing. That is a positive right? So why is the ADX still trending down? Is it also just displaying a pullback?

Is hitting the support level enough to cause us to think "this is it"! This is a tremendous lesson learner chart, it seems, for all of us. I appreciate you, in the know, taking your valuable time explaining to the me and the rest of us so we can learn from 'the masters'.

TIA!!!

[David Randolph]

So many interesting posts to review at this VPHM thread, that's great  I'll try to answer some of them:

Hello,

David left me instructions to buy back VPHM if the support was tested.

That's exactly what I'm doing right now Wink

Bought VPHM @ 9.89 for the 3 Stocks Onfire Portfolio.

The chart speaks for itself.

Good job Fred, thanks.

Man I gotta watch those lines better. Got in too early today
1500 @ 10.24

You sure do Art, why the $10.24, any particular reason? Maybe you just wanted to buy on a pullback, and since VPHM is enjoying a bull trend, nothing wrong about not buying at the exact support. You did well I believe.

Where is the support on VPHM?

For today the ascending trendline will stand at $10.08. It rises $0.12 everyday.

The linear that was used will probably work out but I just wanted to point out the two variants as it is good to check them both on stocks that have had big moves. Most of the time I use log charts as they work more for the average stock or index.

I agree Metro, but first I look to use the normal scale (just keeping it simple), and then, when that's impossible to do, I'll look for the semi-log scale. VPHM has a perfect trendline on the regular scale chart, and the trendline on the semi-log chart isn't valid, it doesn't has 3 touches and reactions on it.

But always checking the two scales is wise, thanks for the input Metro.

Se7en said:

I'm also tempted to buy but what if it closes below 9.78$, can we expect a further drop if this happens?
Currently it's at 9.75 ...

Ramsburg answered:

Yes, that's exactly the risk on this trade. The support level will be our stop level.

This is a technical play, we are betting on the support reaction, and also we think VPHM is too much oversold on the short term.

Well, not so fast. First, I never day trade, so if I buy at support I won't be selling that day just because support was broken on close. I'll coldly analyze after the close and decide for the next day's session.

Also, VPHM isn't just a technical play, it is a fundamental play too.

This is a dumb question, but I've never placed a stop order before.. How would I do it.. I'm on Ameritrade and do I choose

a.) stop market
b.) stop limit
c.) stop %
d.) stop $

I bought in at $9.82  , where should i place the stop and what type?   thanks in advance

You shouldn't place any stop. Don't consider intraday moves. Let me try to answer your questions about stop orders:

a.) stop market - If your stop price is hit your broker will sell your stocks at the market.
b.) stop limit - If your stop price is hit your broker will put a limit sell order on the market with the price limit you've placed on the order. For example, «if VPHM hits $9.5 I want to sell, but only until $9.40, not below that level»
c.) stop % - It depends on your broker, it can be «sell at the market if I'm losing 10%», or «sell at the market if the stock is down 10% on the day»
d.) stop $ - Also depends on the broker. It can be «sell if I'm losing $1000 on this stock», or «sell if I'm losing $1000 on this stock today».

Due to the volatile nature of VPHM, I wont dare to put a stop, however, will analyse it 'end of the day'.

Can't say where you should put the stop, b/c I am not doing it myself.

I agree with stocky !

Options Expire at close Fri Aug 19 2005, will this have any impact on the pps next week?

I would keep it simple and forget about options.

Stops still scare me. David talks about 30% loss's. That scares me also. I guess it's because I'm still not all too sure about my chart reading skills (as was evident today). All a continuous process, and now that I'm retired I can continue learning till my 401k is all gone Tongue (don't tell my wife I said that Cheesy)

Lol Art. Hey, 30% is my absolute limit stop, my maximum pain level on any given position, but usually I take much smaller losses. Art, from reading your posts, your concern about the 4% intraday loss on VPHM I wonder how much diversification do you have? It's a common mistake, a beginners mistake, to put all eggs in one basket. On the US stock market your 401K won't live long if you don't do proper diversification. As a rule, you can't put more than 20% of your trading capital in just one stock, you just can't. And 20% is a lot, I don't put more than 6.66% in any given position, but 20% would be my absolute limit, regardless of the size of the account.

Well, I need another post to continue answering your great posts on VPHM, or no one would read this one, being so big ... 

[David Randolph]

I can answer 2 for sure......

a.) stop market - when the price hits this level your shares will be sold at the market price. For example if you have 1,000 shares and a stop at 9.60 as soon as a trade occurs at 9.60 your shares would sell for whatever the the highest bid (market) price is. In theory you could have 500 sell at 9.60 and another 500 sell at 9.59 etc.


b.) stop limit - when the price hits this level your shares will be sold at the price you designate or higher. If you have 1,000 shares and a stop limit of 9.60 you guarantee they will all sell for at least 9.60. The risk on this is if the market gaps substantially down you may not sell your shares. For example if a trade went off at 9.60 and the next bid was at 9.57 and they continued downward your shares would not sell

Thanks for the explanation KCScott. Just didn't understand this part:

BTW - all of these orders are also useful in buys, say your looking to buy on a dip in price, or if your looking for a stock to run at a certain price.

I don't see how a sell stop order might help you buy a stock, but I guess I see what you mean, if you want to buy a stock if a resistance line is broken, say «if STOCK is above $10 buy at the market». I believe almost nobody uses these kind of orders to enter the market, I never did ...

Thankfully we didn't need to worry about those stop orders getting tripped today since VPHM had a solid close.

Yeah 

What a great end of an otherwise mixed week. 3SOF is holding VPHM again  Cheesy

I am off for a week to Mozambique (Thinking about moving there so we will be looking for a house)

I told you I would buy VPHM again, I just had to ... It was a good thing I didn't have to chase it higher  . Going to Mozambique? It's a paradise on earth, at the right places, many friends of mine have been there (even a great friend of mine was born in Mozambique). Perhaps I can help you with the Portuguese 

Just check the internet connections there, I don't think they work well, and also be prepared for a lot of electricity power failures ... have a nice holiday trip Michael 

I'm glad I saw the 3stocksonfire post on the yahoo message board. I was about in panic mode. (finger hovering over the sell button). Should have sold before earning at $13.
and bought it back today. It looks like you hit support about to the penny. Picked up another hundred at $9.84. Just want to say thanks.

Well jlong, you just need to pay some attention to this board, I'm saying I'll buy VPHM at this ascending support for more than a week now. I'm glad 3 Stocks on Fire helped you make a wise decision.

Can someone explain the macd on this chart? Is it simply displaying a pullback?

And could someone explain the ADX chart also please. The DI -&+ are both crossing. That is a positive right? So why is the ADX still trending down? Is it also just displaying a pullback?

Is hitting the support level enough to cause us to think "this is it"! This is a tremendous lesson learner chart, it seems, for all of us. I appreciate you, in the know, taking your valuable time explaining to the me and the rest of us so we can learn from 'the masters'.

Art, Art, you're entering complex fields. I've been there and walked away. One shouldn't think too much, stock trading is a simple game. I find 95% of technical indicators are of little value. If you aren't a system trader (oh no, here comes system trading), traditional technical analysis works best. Anyway, let me give you Metastock definitions and ways to analyze MACD and ADX:

MACD:

«The basic MACD trading rule is to sell when the MACD falls below its 9-period signal line.  Similarly, a buy signal occurs when the MACD rises above its signal line.
A variation of the MACD can be created by plotting the following formula:
macd() - mov(macd(), 9, E)
Then change the indicator line style to a histogram (see Color/Style Page), and plot a 9-period dotted moving average of the indicator.
In a system test of this indicator, sell arrows are drawn when the histogram peaked and turned down and buy arrows are drawn when the histogram formed a trough and turned up.»

ADX:

«The basic Directional Movement trading system involves plotting the 14-period +DI and the 14-period -DI on top of each other in the same inner window (see Copying and Moving Indicators).  An improved method of displaying these two indicators is to plot their difference using the following formula:
pdi(14) - mdi(14)         

Positions should be taken by buying when the +DI rises above the -DI (i.e., the formula shown above rises above zero) and selling when the +DI falls below the -DI (i.e., the formula falls below zero).

These simple trading rules are qualified with the "extreme point rule."  This rule is designed to prevent whipsaws and reduce the number of trades.

The extreme point rule requires that on the day that the +DI and -DI cross, you note the "extreme price."  If you are long, the extreme price is the low price on the day the lines cross.  If you are short, the extreme price is the high price on the day the lines cross.

The extreme point is then used as a trigger point at which you should implement the trade.  For example, after receiving a buy signal (the +DI rose above the -DI), you should then wait until the security's price rises above the extreme point (the high price on the day that the +DI and -DI lines crossed) before buying.  If the price fails to rise above the extreme point, you should continue to hold your short position.

In Wilder's book, he notes that this system works best on securities that have a high Commodity Selection Index (CSI) value.  He says, "as a rule of thumb, the system will be profitable on commodities that have an ADXR value above 25.  When the ADXR drops below 20, then do not use a trend-following system."»

A technical analyst always looks for confirmations. The more technical indicators point in one direction, the better. I guess this is stage two of technical analysis. On stage 3 you forget what you learned on stage 2 and turn back to the basics again, which is trendlines, moving averages, support and resistance, volume analysis, candlesticks and not much more.

Thanks for your posts, next my current reading on VPHM.

[David Randolph]

VPHM did came to the ascending trendline and we bought it for the 3 Stocks on Fire Portfolio at $9.89, 6.66% of capital as usual.

The stock reacted very well to support, volume has increased and the candlestick pattern is a reversal one. Check the charts below and see that VPHM did close above the opening level, making a small white body. This is almost a doji after a downtrend, but with the bullish ingredient of having that small white body.

Considering the candlestick analysis and the volume analysis I have little doubt that for today VPHM will open and rally all day to close at the high of the day, making a beautiful white marubozu.

The consolidation phase is probably over, it's time to attack the $13 level again.

[KCScott]

Thanks for the explanation KCScott. Just didn't understand this part:

BTW - all of these orders are also useful in buys, say your looking to buy on a dip in price, or if your looking for a stock to run at a certain price.

I don't see how a sell stop order might help you buy a stock, but I guess I see what you mean, if you want to buy a stock if a resistance line is broken, say «if STOCK is above $10 buy at the market». I believe almost nobody uses these kind of orders to enter the market, I never did ....

It's a good thing I don't write instruction manuals for a living. LOL. Limit Buy is what I meant.

A long time ago (before streaming tickers) there was a TA theory for stocks breaking out of stage 1 that if a stock rose X% based on it's trading range and the period of time it was in that range, that it was breaking out into a stage 2. Believe it or not some actually followed that theory and would put triggers 3, 4 or 5% above certain flat lined stocks so when they moved they would catch the momentum going up. I never did but had freinds in the late 80's and early 90's that swore it worked.

I'm really glad to have found your site beacuse what I think I know about TA has probably cost me more money I'd ever admit to. This is a great community you've put together. Congrats

[tommyt]

Great job picking bottom of trendline, you did it perfectly. Glad to have Ramsburg and David with us. I'm not in and out of this one, I'm speculating that it will be over 20 by flu season.

[Terliso]

David, what is your target price for VPHM?

[shawFund]

I would like to give another opinion for VPHM:

Since it reached $13, the stock turned down and yes, $9.8 is the support for the straight line drawn by connecting the previous bottoms.

On the other hand, $11 is the resistance point for 9 day EMA.
Because the 9 day emd has turned down. So, if the stock cannot break $11,
it means that it is still in downtrend which started Augutst 2.

Long term: I do agree that one year target around $20 based on its fundamental.

Also, let us use fib to see how the stock will be going:

The stock basically traded up (no correction) from $2 to $13 ($11 gain).

For 38% retracement, it should test $8.82 before reversal.

For 50% retracement, it should test $5.5 before reversal.

Let us see what will happen for the next few trading days.

[freimuch]

stock up nicely after hours there was a filing for a price increase on their drug vancocin for about 25% on a 20 capsule pkg. momo should con. tommorrow .once again david beautiful job. be  blessed

[Se7en]

Good post from the yahoo board

My take on VPHM action so far..
by:  rajuramas
Long-Term Sentiment: Strong Buy  08/15/05 04:55 pm
Msg: 45516 of 45537

Here's something a bit different:

There is a Doji formed on Friday at support, strongly suggesting imminent reversal to the upside, and the BBs have gotten rather contracted. The longer stochastic is still cycling down, but the faster stochastic has now signaled:

Here's the charts of the sector.... getting oversold, but only early unconfirmed buy signals as yet:


First target would be $11.59, which is the middle of the BBs, or the 20 sma, and would represent a profit of 13.6%. Personally, I would take partial profits there, then loosen the stop somewhat on the remainder (probably at about 7% - 8% or so depending on where intraday support congregated).

Second target would be $13.00, which is just shy of the contracted BBs (+27%). Third target would be as far as a trailing stop will get you above $13.39 (+ 31%), which represents the 4-year high:


Note the tremendous, sustained surge in volume over the last 6 months. That kind of volume pattern and the volatility are not characteristic of momentum traders. About 45% of the float is held by institutions. Clearly, there's institutional accumulation going on here.

The forward P/E is only 13. The company became profitable this past quarter, with accelerating revenue growth. Revenues for the last 4 quarters were $0.3 million to $0.5 million to $6.5 million to $29 million. Revenues for 2005 are expected to be $100 - 105 million. EPS trends over the past 4 quarters corresponding to these revenues were -$1.12, -$1.03, -.$0.95, and +$0.11.

Debt has been cut in half over the last 6 months or so, and is not bad at $86 million currently (they've got $39 million in cash, and market cap is $500 million). There are few shares held short unfortunately, but the stock is up 580% over the last year.

The downside here given the valuations, the current status of the sector, the orderly uptrend off a prolonged base, the relatively tame volatility, and the recent pullback to pretty good support with oversold conditions all indicates a low risk trade with considerable upside potential. Note also the relatively low correlation with the NDX or QQQQ over the last several months, and the fact that VHPM has greatly outperformed the general market:


VPHM has also greatly outperformed the sector since March or so:


So VPHM is cheap, oversold, has little or nothing in the way of potential trouble signals, has a lot of indication of upside, and is steadily getting stronger in comparison to its sector and the overall market.

This is the sort of trade where risk/benefit indicates a larger position size is warranted IMHO.


AND.... (I've saved the best for last, just for Gush).... VPHM trades options!

[Se7en]

up +5% AH!!!

http://xml.10kwizard.com/filing_raw.php?repo=tenk&ipage=3635298

Item 7.01 Regulation FD Disclosure



Effective August 16, 2005, ViroPharma Incorporated (the "Company") is implementing a price increase to wholesalers for sales of Vancocin® Capsules in the United States. The wholesale acquisition cost for a 20 unit package of 125 mg Vancocin Capsules will increase from $195.76 to $242.10 and a 20 unit package of 250 mg Vancocin Capsules will increase from $368.86 to $446.32. This price increase was not contemplated by the guidance issued by the Company on August 2, 2005.

[David Randolph]

Thanks for your posts on VPHM 

Yes, we've had good news after the close on VPHM:

«Effective August 16, 2005, ViroPharma Incorporated (the "Company") is implementing a price increase to wholesalers for sales of Vancocin® Capsules in the United States. The wholesale acquisition cost for a 20 unit package of 125 mg Vancocin Capsules will increase from $195.76 to $242.10 and a 20 unit package of 250 mg Vancocin Capsules will increase from $368.86 to $446.32. This price increase was not contemplated by the guidance issued by the Company on August 2, 2005.»

I don't know what is the percentage of sales of Vancocin in total sales of VPHM, anyone has the time to get that information? (it's 2 AM here, I must get up at 6:30, so I'm in trouble  )

That way we could grasp the impact of these news on the company's overall sales and earnings. Anyway, putting prices up (up a lot I might say) shows the company has pricing power, and pricing power is always a good thing.

In the previous analysis I said:

Considering the candlestick analysis and the volume analysis I have little doubt that for today VPHM will open and rally all day to close at the high of the day, making a beautiful white marubozu.

You got that marubozu on the chart below 

Now, for tomorrow, the stock will probably open sharply higher, maybe come down to close the opening gap and maybe not, since it was already on its way up to $13 even without these news. And I won't sell at $13, no way, after this successfull test to the ascending trendline I expect a new 52 week high in the stock, above $13.39 to be reached in the coming weeks.