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  • teadowner teadowner May 14, 2006 11:33 AM Flag

    Three, two, one

    and soon there will be NONE.

    What�s next after $15.15? Answer: Three targets.

    *First target is $16.83, the 52-week high.

    **Second target is $18.25, the 50% retracement of the BM (Black Monday) gap.

    ***Third target is $22.00, based upon the latent power of the NBV (Net Buy Volume).

    I would like to share with you my random thoughts regarding Candlestick charting�

    Last Friday, Elan formed a long white candle (candle body greater that $0.27)�.

    ...hXXp://stockcharts.com/h-sc/ui

    From Elan�s past trading patterns, it has been observed that �whenever a long white candle is created after a consolidation, higher highs will follow�. The track record is 100% correct and you could see for yourself in the above chart.

    Please observe long white candles were formed on 11/11/05, 12/5/05, 12/14/05, 12/22/05, 12/30/05, 1/10/06, 1/27/06, 2/15/06, 3/1/06, 3/29/06 and 4/19/06. Every single long white candle was followed by HIGHER HIGHS. No exceptions!

    What does it mean?

    Well, since Elan was @15.86 after creating a long white candle which is in reality within a striking distance to $16.83, the 52-week high. A 6.5% move from Friday�s close will render this 52-week high history. Hence for all practical purposes, the first target is a slam dunk due to the guaranteed �higher highs� as a result of the long white candle last Friday.

    How about the 2nd target of $18.25?

    The Momentum Gap Theory states that �the down gap will be retraced by at least 50% if the company takes steps to right its wrong. If the company has completely eradicated its wrong, then a 100% retracement is possible.�

    Also, I wrote last Thursday, �T/A told me that whenever the NBV was at or above 2.4M shares, the pps would soar afterwards.� Last Thursday, the NBV was 2.77M shares and on Friday, the NBV was 3.85M shares.

    Based upon the above, do you honestly think the $18.25 will present much of a problem to the momentum boys?

    Therefore the real resistance should be the third target of $22, a calculated number according to the NBV (see the calculation in my prior writing). Also this number is being confirmed by Points & Figures charting ($21.50 projected) as follows:

    ...hXXp://stockcharts.com/def/servlet/SC.pnf?c=eln,P

    What are the odds for 2 separate T/A tools projecting virtually the same number?

    $22 da number! I rest my case.

    Best regards

    PS1. Some keen-eyed dudes might ask, �What about the long white candle on 1/18? Why didn�t higher highs follow?� My answer: First, the 1/18 long white candle was not created after a consolidation. It was formed at the exhaustion point of an extended move. Second, no T/A tool in the world could have foreseen the event of 1/19 when Lehman smeared, BIIB betrayed and TEVA attacked. Their stunning effort had set us back for 4 months. Third, Elan is on the verge of catapulting through the 1/18 high despite all these setbacks. After all, the �whenever a long white candle is created after a consolidation, higher highs will follow� observation is still FLAWLESS after a 4-month dealy.


    PS2. Coming events�
    ***1. US Ty re-approval (expect anytime soon)
    ***2. Digestive Disease Week on 5/23 (expect positive Ty news in Crohns Disease)
    ***3. Elan shareholders� AGM on 5/25.
    ***4. EU approval of Ty for MS (expect by the end of July)
    ***5. US BLA filing of Ty for Crohns Disease (expect after July)
    ***6. EU BLA filing of Ty for Crohns Disease (expect after July)

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