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

[David Randolph]

Here we go again on VPHM 

On the technical front look how the 9 ema is providing support to price (input by aussietrader). On the fundamental side read this explanation from Michael:

Piper Jaffray expected an 8.4% decline of Vancocin Sales in Q3 compared to Q2. The August sales were only down 2 compared to July according to IMS so it seems like JP's EPS has to be revised significantly up as expected (with $0.20 to $0.25).

With help like this we just can't stop making money 

Now $17.30 will act as support and I'm already seeing $20 on print.

[Se7en]

Interesting post from Yahoo board:

I have yet to get excited about yesterday's breakout (low volume compared to their average, as stated in my previous post) is their Bollinger Bands.

Since their new high set on 5/11 VPHM has had a Breakout 5 different times. The first 4 were high volume breakouts. This one was not.

The first breakout was on 5/26 where volume was 690.02% higher than the average with the Bollinger Bands 248.62% wider than normal the day before. More than likely the reason for this breakout being successful, despite the bands being so wide, is because this was near the beginning of the VPHM bull market.

The second breakout was on 7/5 where the volume was 288.47% higher than average with the Bollinger Bands 51.35% wider than normal the day before. Breakout successful...

The third breakout was on 8/1 where the volume was 106.27% higher than average, but the Bollinger Bands were 280.69% wider than normal the day before... too wide... The breakout failed.

The fourth breakout was on 8/16 where volume was 1,016.87% higher than average with the Bollinger Bands 62.87% wider than normal the day before. Breakout successful...

The breakout yesterday only had volume 2.95% above average (not impressive) and the Bollinger Bands the day before were 341.43% wider than normal... too wide again.

Obviously no one is correct all the time. That is not my point. My point is to report the story that VPHM is telling.

Rarely is a breakout, even a high volume breakout (which this was not) successful when the Bollinger Bands are so wide.

I am not saying this stock will tank like it did the first half of August after VPHM's unsuccessful breakout.

What I am saying is that we need some more consolidation to occur before we get our next, more powerful breakout.

The good news is that the Bollinger bands have been getting slightly narrower the past 3 days, not counting today. Today will be 4. In order for VPHM to return to the same area where successful breakouts have occured we need somewhere around 2 more weeks of consolidation.

If this consolidation happens, prior to our next breakout, then we will see empty candlesticks ahead...

[David Randolph]

Interesting read indeed Se7en, thanks for posting 

Perhaps the man is right, but I think it is normal for the volume not to be so large like it was in the past. More, he's basing his calculations on share quantity volume, and of course, 1 million shares traded at $17 represents a lot more money involved than 1 million shares traded at $4.

Yesterday's fall might have been just a retest to prior resistance, now support. The close was exactly $17.30, a value that's probably on traders minds when they think about the short term on VPHM.

Or else, if the stock closes below $17.30 again, we've had indeed a minor false breakout and the consolidation phase will continue.

Time will tell. Either way I will continue holding the stock.

[David Randolph]

Perhaps the bullish breakout we've had on Wednesday was false, but it sure doesn't look like. For two days in a row the $17.30 level held VPHM on close, and I find that to be a bullish behavior. Anytime, maybe today, another white marubozu will send the stock to new highs above $18.

Even if VPHM closes below $17.30 I will still hold the stock, VPHM deserves some room to maneuver.

[David Randolph]

Oh well, that white marubozu didn't come, in fact the stock closed below $17.30, at $17.12. The 9 day moving average that aussietrader provided us has sustained prices once again today.

At last we've had a press release from the company, we didn't have any word from them since August 17th. It's no big deal, but it is better than nothing:

ViroPharma to Webcast 'Teach-In' On Clostridium Difficile Disease

Oh God, I'm starting to wonder how this 70% plus gain would show up on the return of the 3 Stocks on Fire Portfolio (the return is calculated using closed trades only, Ramsburg is working to change this, for performance to change intraday as the quotes change, that's more dynamic and real).

But I feel the stock has been so benign to us that it deserves some opportunities to show why it should continue to be on the 3 Stocks on Fire Portfolio. So I'll give it a chance and sell only if we get a close below the 9 day ema, which for tomorrow will stand at $16.91.

[JVC689]

The "teach in" should include how this disease can be totally eliminated with proper hospital isolation techniques.

It should also include that I can get generic Vancomycin for 1/10 of what it is selling and easily formulate it for GI absorption...and I have a company working on this.

Likewise culture and sensitivities shall be in progress for other antibiotics in the same family which probably still work as C diff is gradually building resistance to Vancocin.

Charts often defy reality...but only for so long.

Good Luck,

Dr. John

[Terliso]

Today in AmericanBulls.com for VPHM....
http://www.americanbulls.com/StockPage.asp?CompanyTicker=VPHM&MarketTicker=NASD&TYP=S

[stout7735]

This gem is at resistance,poised to breakout above $18.17,to go to $22.30..I think your stop is too high, but under your advise,I set my stop at $16.48(higher than $16.10)...I am speculating a bump up in prescriptions of vancocin to treat side affects of antibiotic treatment of New Orleans patients... The technical "high wave" doesn't reduce strength as much as it questions direction???

[basanlas]

Oh well, that white marubozu didn't come, in fact the stock closed below $17.30, at $17.12. The 9 day moving average that aussietrader provided us has sustained prices once again today.

At last we've had a press release from the company, we didn't have any word from them since August 17th. It's no big deal, but it is better than nothing:

ViroPharma to Webcast 'Teach-In' On Clostridium Difficile Disease

Oh God, I'm starting to wonder how this 70% plus gain would show up on the return of the 3 Stocks on Fire Portfolio (the return is calculated using closed trades only, Ramsburg is working to change this, for performance to change intraday as the quotes change, that's more dynamic and real).

But I feel the stock has been so benign to us that it deserves some opportunities to show why it should continue to be on the 3 Stocks on Fire Portfolio. So I'll give it a chance and sell only if we get a close below the 9 day ema, which for tomorrow will stand at $16.91.

David,

Did you sell at close? Close was at $16.45

[David Randolph]

But I feel the stock has been so benign to us that it deserves some opportunities to show why it should continue to be on the 3 Stocks on Fire Portfolio. So I'll give it a chance and sell only if we get a close below the 9 day ema, which for tomorrow will stand at $16.91.

VPHM was clearly set to close below the 9 day ema, which was standing at $16.91, so, like it was planned, I sold the stock at an average price of $16.40.

This 66% profit on VPHM has put overall portfolio performance at 160%, which is great considering the portfolio started just last April.

I wonder if I'll be able to buy VPHM, again, at the ascending trendline ... that would be a perfect technical behavior and call. That ascending line for tomorrow will stand at $12.52, rising $0.12 everyday ... so here we go again, trying to bottom fish VPHM at support. It would be fun if the stock danced this song with us all the way up to $48.

Well, day by day, you know I'll be watching and trying to buy again at support.

[Se7en]

I'll follow you David, i will sell tomorrow at the opening!

[Terliso]

Well,  i sold VPHM by accident two weeks ago at $16.21... i put a stop-limit order but i'm happy 

[Prfsr Hal]

What do people think about STOP LIMITS?  Some posters on other boards view them as the enemies and that they are there to be gobbled up by ravenous MM's. 
Prfsr Hal

[jlong]

David you were right before, and I think you are probably right again. Have owned this since it was around 3$, this stock has been a good friend but appears to be becoming Quite volitile and losing strength. I hate to say goodbye to this pick but I can see it going back to support. Gonna take profits and move them to Hom and or Bcon and wait for contracts.
and have to buy more brvo at these prices (once dumping of shares are over will be an easy double). I think this is  a good call.  happy trading to all!

[la-onda]

interesting quotation from yahoo board:
http://messages.yahoo.com/bbs?.mm=FN&action=m&board=7077380&tid=vphm&sid=7077380&mid=55529&um=50&.sig=VPueIqLahgfS.lyMb3GmMA--

Here we go... Just to bring you up to date, here is what the Bollinger Bands have looked like so far...

9/1 364.86% wider than normal
9/2 357.35% wider than normal
9/6 341.43% wider than normal (day of breakout that did fail after all...message #54627)
9/7 320.20% wider than normal
9/8 284.66% wider than normal
9/9 234.28% wider than normal
9/12 162.28% wider than normal
9/13 80.95% wider than normal

It looks like the bands are on a collision course with each other. Obviously that would never happen.
The narrowing should slow down starting tomorrow, unless we go into the narrower than normal range...

Today was a down day, but the volume was still light (59.51% less than the 50 day average). So no worry after today's action, since it is still above the pivot point from the last successful breakout.

VPHM is in the range I hoped it would go, but it got there a few days quicker.

One thing that you could watch for is the Darvas Boxes. After today's action, there was an increase in the price range of the Darvas Boxes. They are now at $17.95 for the upper box and $16.33 for the lower box.

There are only 2 times since the 5/11 high where VPHM has come anywhere close to the lower box.
The most recent time was on 8/8 where VPHM blew right through the lower box on the way to finding strong support at the major trendline.

The other time was on 7/1 where VPHM found support on the lower box and bounced off of it. The next day was a high volume breakout.

Here is something I just noticed. There have been 3 successful breakouts since 5/11, right? and 2 failed breakouts...

Of the 3 successful breakouts, the lower Darvas Box and the 20 MA (the default moving average of the Bollinger Bands) have converged.

On 5/26 the Breakout occurred when the 20MA had coverged within .04 cents of the Lower Darvas Box.

On 7/1 the Bounce occurred when the 20MA had converged within less than .08 cents of the Lower Darvas Box. The next day VPHM bounced directly off of the 20MA which resulted in a high volume breakout.

The last successful breakout was on 8/16, when the 20MA had converged to within less than .11 cents of the Lower Darvas Box.

The 2 breakouts that failed were on 8/1 and 9/7 where the width between the 20MA and the Lower Darvas Box were .40 cents and .53 cents.

Right now the 20MA has converged to within 11.6 cents of the Lower Darvas Box...

Tomorrow they will be pretty much right on top of each other...

Some people may be laughing, but it is proven that when two or more support lines converge, it creates a stronger support area.

Let's see what happens tomorrow...

comments from TA experts are appreciated