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

[bjc]

I'm not saying VPHM will go up 7 points to the target range tomorrow.  I'm using VPHM as kindof a safety trade.  I feel like I picked up shares at a level where I can't really lose a great deal, especially since the stock sold off on great earnings for pretty much no reason (other than the conservative guidance, which kosmo kramer addressed.)  I bought my shares at 20.16 before the stock fell to 19.35 yesterday.  I've been staring at charts all day and just realized I saw something in the chart, and posted to see if it was in the general vacinity of being correct.  Thank you very much for responding to my post..

I was in VPHM about a month ago or so.  I felt the volume fading around the peak(while it should be accelerating), and for about the first time I actually timed an exit correctly(sold at 22.99).

I'm currently looking for low risk/high reward trades.  I guess that's what everyone's looking for, but I feel like VPHM and AOB are outstanding trades right now.  I guess a safer trade on AOB would be to wait for price to cross the 20 ema, but I feel like the support at 5 will hold based on fundamentals.  Also I'm in INSM, which I bought a little bit early on the pull back also about a month ago at 2.40.  I'm finally in the green..

Anyhow, I feel like we have a pretty good situation right here in VPHM.  (Michael's on our side, isn't he?)

[Melf Elf]

bjc and Scotsman,

Nice analysis.  Applauds.

Short-term, we've got the technicals trumping the fundamentals:

1. February 27, in anticipation of good earnings, we got "Gap To Crap" #1.  The low of that day was 21.10, which became key for those who bought the 22.17 open, or the brief rally to 22.25.

2. On the earnings release February 28, we got "Gap To Crap" #2.  Open was 22.21.  High was 22.30.  The prior day's low of 21.10 also became key for those who bought that open.  When 21.10 got broken with a print of 21.09, players who bought either earnings-related "Gap To Crap" opening had a problem.   

Short-term, it was "sell the news,"  and the stock sold off.   At the end of day, both "Gap To Crap" buyers had a paper loss of about 13% at the close of 19.35.

3. Yesterday, on the Cramer BOOYAH, we got a third "Gap To Crap."  The open was 21.04.  The print high on the day was 21.08 near the open, right at the prior day's "recognition point," (the print of (21.09)), that the earnings were being sold.  The stock backed off from there. 

My take on yesterday is that the "Gap To Crap" buyers of the prior two days who were sitting on a paper loss of 13% were happy to get out of their losing positons (weak-handed longs) and relieved to hand over their stock to Cramer's crowd (distribution).

Very short-term, bulls need to take the stock back above the 21.08-21.10 pivot, and hold that level.  That will look much better, technically.

Next order of business would be to release the "Gap To Crap" bulls who are trapped above 22.00, (highs are 22.25-22.30) who want out (weak-handed longs), then take it higher.

A couple more Cramer BOOYAHs might be helpful.   

[la-onda]

good news again:

ViroPharma Announces Elimination of Debt
Thursday March 2, 7:30 am ET 

- Company Takes Important Step in Optimizing its Capital Structure -

EXTON, Pa., March 2 /PRNewswire-FirstCall/ -- ViroPharma Incorporated (Nasdaq: VPHM - News) announced today that it has eliminated its long-term debt in its entirety by redeeming the remaining $79 million principal amount of its 6% convertible subordinated notes due March 2007. ViroPharma paid holders 100.857% of the outstanding principal amount of the notes plus interest accrued to (but excluding) March 1, 2006 as required by the indenture for the notes. By redeeming the notes early, ViroPharma will reduce its annual interest expense by four million dollars over the remaining one-year contractual life of the notes.
"With the completion of redemption of all of the remaining outstanding 2007 notes, we now have the strongest capital structure in our history," commented Vincent Milano, ViroPharma's chief financial officer and chief operating officer. "We ended the year 2005 with $233 million in cash and cash equivalents. Today, we utilized $79.6 million of our cash to eliminate our remaining debt in its entirety. Now, with a significant and growing cash position, strong cash flows, and absolutely no debt, we are in a position of great strength enabling us to further leverage our strong capital structure to acquire additional value drivers for the company, and for future corporate growth."

[ScottishTrader]

Interesting blog reporting on VPHM and also a good account on what actually happened over the last couple days of trading.  Kinda makes sense.

http://strades.blogspot.com/

With all the good news, I am just waiting for a reflection in the share price.  Cmon VPHM!!!

[la-onda]

VPHM updates:
Fully updated VPHM info:

http://phoenix.corporate-ir.net/phoenix.zhtml?c=92320&p=irol-SECText&TEXT=aHR0cD ovL2NjYm4uMTBrd2l6YXJkLmNvbS94bWwvZmlsaW5nLnhtbD9yZXBvPXRlbmsmaXBhZ2U9NDAwODAxNS Zkb2M9MCZhdHRhY2g9b24=

Thanks for posting the blog link ST!

reason for price action a few days ago:
On 2-27 and 2-28 a lot of stock holders had their long confidence shaken when 2 companys, Baker Biotech Capital Ii (gp) Llc and Capital (gp) Llc, sold a total of 660,410 shares. I wouldn't exactly call them insiders since they are not part of company management. I posted the news below as it came across, but it has a negative bias slant. Companys, and individual, shareholders sell shares to close out their position, and many times that time is when momentum is greatest, like an earnings release. The greatest momentum days were 2-27 and 2-28 when the volume allowed these 2 companies to sell into that strength. Of course, this selling caused a lot of long sell stops to get hit, and the PPS (price per share) dropped dramatically while breaking support of the 10 and 50 day EMA.

link:
http://strades.blogspot.com/2006/03/who-sold-down-vphm-viropharma.html

Today news were great; I am continuing to hold my core VPHM position 

[ScottishTrader]

Strange that we did not get more of a move, given this news about them eliminating all debt, and the positive notes from the CC.   Perhaps most of this was already known or expected from the CC. 

Still, I am sure VPHM can't be held down for too much longer and should makea push above $21 very soon.

[Melf Elf]

OK so my TA is better than Melf's, at least where VPHM is concerned. But who's keeping track?  

Luke,

I'm certainly not keeping track. You didn't mean me, did you? 

You're mighty-y quiet lately about that superior TA of yours.

I bought today at the open. What can I say, Cramer's words moved me. $-)

Mighty-y-y quiet since you bought that BOOYAH "Gap To Crap" opening.

Talk to me when you'd like me to remove the hex I put on you.     

[thai626]

It's like an infant. One can't expect an infant to start walking three days after she's born. One can't stand at the edge of its crib and scream at her: "Why aren't you walking you dumb little infant, you're three days old!!"

Luke Luke Luke!!!  That's not entirely true.................If a kid who can barely stand on two feet can crave "titties and beer", I think walking at 3 days old is not out of the question   

[Melf Elf]

There's not much to update TA-wise. The call still stands for a move to the top BB short term. I plan for VPHM to be a longer-term hold as I expect $40 some time this year, so I'm giving it space to do its thing.

Luke,

Okay.  I just was "acknowledging" your smart ass remark.  I missed it when I was away from the board, and didn't see it until yesterday when I was reviewing my analysis.

 

The markets struggled today and decliners outnumbered advancers by 2 to 1. VPHM moved with the market which is what I'd expect with no news and no established trend at the moment

Agree.

VPHM closed back below all three sell levels yesterday, but it closed smack on the up trendline off the 18.65 low.  That trendline came in yesterday at 19.641.  It was penetrated intraday (low was 19.51), but it managed to close at 19.64.   Yesterday's third hit validates that up trendline as support if VPHM can rally immediately.

The top of the Symmetrical Triangle (pattern in green) is right near your Upper Bollinger Band. 

[Melf Elf]

Yesterday's third hit validates that up trendline as support if VPHM can rally immediately.

I said "immediately" because that trendline came in today at 19.719 (see chart above from this morning), and since VPHM closed yesterday at 19.64, it had to "chase" the trendline right from the open, to get back inside the Symmetrical Triangle.

VPHM got to 19.75 in the first few minutes of trading, three cents back inside the pattern, but that was all it had, and it fell fairly quickly.

The bearish technicals (three sell signals) still are dominating the chart.  The Symmetrical Triangle trendline failure at 19.719 is Sell #4.  The up trendline (resistance) of that pattern for tomorrow, March 8 will be at 19.797.

Horizontal support for a "possible" double-bottom is 18.65-18.77.

[KCScott]

See Chart:



One trend that stands out is every penetration or touch of the lower Bolinger Band (5 times begining Aug 14) has sent the stock back up a minimum of 15%

While it did not penetrate today, I expect to see a print somewhere below 18.84 tomorrow followed by a surge up.

Is the Trend our Friend?

I think so....... By the way, I believe this strategy also bares out in Melf's mention of the possible double bottom. Again, I'm only expecting a touch, based on history, so those of you looking to buy need to be watching when it gets there.

I'm traveling so Grabbed tomorrow so I grabbed 500 more at 19.23 - Now in for 1,000 at 20.12

Good luck to all

[Melf Elf]

One trend that stands out is every penetration or touch of the lower Bolinger Band (5 times begining Aug 14) has sent the stock back up a minimum of 15%

Scott,

Good observation.  Applause.

Yeah, with the 4 Sell Signals on the chart and with the technicals looking weak, VPHM needs to do something like that, like the double bottom in November. 

At the February 28 earnings, MACD failed from below its signal line AND failed at the zero line.  As we've discussed in other folders, that can indicate a pretty good selloff if support is getting broken on the chart. 

Yesterday, MACD went to a new low for the move, so at the moment, it's confirming the chart weakness.  I'll show you the MACD in the next post.

[Melf Elf]

MACD

[KCScott]

My meeing got delayed and I managed to get another 1,000 at $18.08 this AM.

So we have our penetration below the lower BB today - If we finish white rocket this will roll as it confirms the previous 5 times.

If it's down, stick a fork in me cuz I'm done

[Melf Elf]

Yeah, with the 4 Sell Signals on the chart and with the technicals looking weak...

Scott,

The chart and technicals certainly were telegraphing the possibility of the panic selling to 17.75 on volume at the open this morning, but I didn't see news that would account for it.

As scary as that looks, it's much better for the stock than the recent action in the stock, as far as the possibility of making a bottom is concerned.  If VPHM can close well today on a bullish candlestick, like you mention, we could have seen some kind of low this morning.

Bottoms don't get made when a stock "gaps to crap" a lot, then sells off the rest of day like VPHM has been doing since the day before earnings were realeased.

Good luck!  I hope that your trade goes well.