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RXi Pharmaceuticals Corporation Message Board

  • marksch58 marksch58 Mar 4, 2014 2:06 PM Flag

    3 points on the TA

    for what it's worth, folks, here goes
    Hanna, I totally disagree with your take on the recent action. After the big run up, rxii formed a classic 'bull pennant', this is TA 101 and I've traded this pattern a million times. If I was trading that particular pattern, anticipating a breakout on Monday, I wouldve used a mental stop around 5.85 or so, since a move down there would have proved the pattern (and me) wrong, I wouldve taken a small loss and moved on with my life. 2nd point-TA doesnt always work with thinly traded stocks, totally agree with that point. 3rd point-I agree with red and zray, I've been screwed by MM's too many times- they will find a way to take your stop out if they want too, and neither interactive brokers or td ameritrade will do anything about it. There you go, more free advice.

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    • Remember, pennants can break either way. A bull flag is a better TA signal for bullish continuation. This stock is acting perfectly in line with TA, except for yesterday's bear raid, which is never predictable.

      • 1 Reply to red.900901
      • red, I would just say one thing. Bull pennants and bull flags are called 'continuation' patterns for a reason. They usually resolve in the direction of the original move. The reason I love trading pennants is this...after 3-5 days of forming the pennant, the stock movement is minimal. I can anticipate the breakout, take a position, with a stop right below the pattern, youve got minimal risk that way. It's harder to anticipate a flag breakout, unless there's another area of support coinciding with where you think the flag will stop. In other words, in my opinion, its easier to anticipate a pennant breakout with minimal risk, a flag is a little trickier.

    • marks, spoken all too well. For the reasons you outlined above, TA is not always applied the same way for all stocks. If you look at the past six month chart of RXII you can see that they have been violent pull backs. In fact, I expect the stock to possibly pullback again near $5. The main reason being because of the low float. The fundamentals also must be viewed differently for biotech stocks versus other stocks. As long as the milestones are being reasonably met, as long as there is enough cash on hand to fund R&D and the FDA approval process then the stock is a hold or a buy. What is so appealing about RXi is that they are the only ones who are applying this technology in a unique way (delivery), they have have been approached by a strong European distributor for "specials" designation, their market cap is ridiculously low, their CEO is highly competent, the market for their application is beyond a $1BL, even though they have enough cash on hand to see through the FDA process they are looking for a partner who has expertise and cash so that they may not have to raise anymore capital at all. The scarring from breast surgeries is a huge market and once they begin that phase of the product approval cycle this stock will at least double. Actually, at that point, I hope there is dilution so the stock can trade more evenly and they can expedite their product development.
      My message is: Don't get shaken out; buy and hold and stash under your mattress for a year or two and then check back to see the price per share. You might be surprised!

      Sentiment: Buy

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