This is probably a revelation to them, but when a company puts out a great quarterly report, institutions do not jump into the AH market to #$%$ up 500 shares. Retail investors also sit idly by and wait for the huge rally. (Unless they are trapped in a short squeeze, as they were by TSLA MM's today.) The 5 price target raises yesterday demonstrated that the professionals were revaluing PCYC upward. They win because they are more patient.
CELG is a swell investment. Their drug for psoriatic arthritis, Otezla, is going to make them a lot of money. I own some of it. All of this comes from the cashflow created by Revlimid and the other successors to thalidomide, the despised drug which they bought and developed. This is one of the things about GILD which is generally unappreciated: If you have a lot of real smart people working for you and you are generating huge amounts of cash, you are probably much better at investing that cash in the pharma business than the guys on Wall Street. Remember, when Gilead paid $12 billion (if I recall correctly) for Pharmasset, Wall Street drove the stock down, figuring that these guys were bozos. Pharmasset, of course, is the foundation of Sovaldi, Harvoni, etc. Some bozos. In other words, when you buy stock in this company, you are also buying a pharmaceutical venture fund run by some of the smartest people on earth.
Good for you, fishart. This guy has been buying puts all the way up from 90, if I recall. (If he'd really been shorting, he would have been wiped out by now.) The MM's were handing him a gift yesterday, but he was like a deer frozen in the headlights. This is why options traders almost always lose - they can't even quit when they're ahead. This is also why the Najarian brothers wear such expensive shirts.
Of course, the tell will be if they cross a few trades in the premarket at, say, 106.20. If they offer them, I may buy them. I have the strong feeling that, come Monday, they will want to be selling the 120 calls, which will take a bit of a rally.
PCYC also had an excellent quarter and had a brief runup AH. After which some retail investors, disappointed that the institutions did not jump in and bid madly for their few lousy shares, sold it off. But yesterday 5 different investment houses raised their price targets and today it went up 7 bucks. If, along with the unwashed, you had been disappointed that it did not immediately jump on the good quarter and had sold your shares, you'd feel like a fool today. Remember, the investment houses are patient. They do not say, "Ohmigod, I have to grab those 500 shares of MDVN at any price!" and jump into the AH.
First of all, this nickel shortfall should be a surprise to no one. It wasn't to me. The explanation for the stock wilting in Sept/Oct was the Russian trade embargo. My own explanation was that they derive most of their earnings from overseas, and when the dollar appreciates against the euro, the yen, the ruble, - in fact all major currencies - one would expect earnings forecasts to be adjusted downwards. In fact, the strength of the dollar alone would explain a nickel shortfall. But, according to Yahoo!, not a single analyst lowered their earnings forecasts over the past 90 days. (Duh!) Even though the stock was dropping like a rock. For 6 of the past 7 trading sessions - a time when the market was generally advancing - short sales constituted over 60% of the daily volume in this stock. Culminating in today, when over 70% of the volume was short. And yet, when the earnings are announced, there seems to be a stampede of disappointed investors to the exits. In other words, this is an organized bear raid. If it follows true to form, they will let it up in the morning to encourage more longs. At this point, I will sell the shares I bought AH today. Then I will wait until they attack it again and buy it in stages. And you will see that on days when the overall market is weak, they will cover their shorts. I also question the wisdom of a short raid where the CEO/founder owns about 2/3 of the shares outstanding and, if you make him mad, could write a check for the rest. Weill see. Interesting.
O Genie, O All-Knowing One, I can't help noticing that your favorite stock (the one which owns the immunotherapy which MDVN doesn't have) is down a dime today to 83 cents. On the bright side, this is three cents above its alltime low. (By the way, you do know that "Berkeley" has two "e's, don't you?)
The puts are collapsing, Stan. The active ones for tomorrow just got wiped out and the Nov22 puts are dropping fast. If you're still pumping them, I think you stayed too long at the party.
They were buying heavily at just under 107, so you knew it was going to close no lower than that. I added 500 shares just under there and put in an order for another 100 at 106.54, which, to my surprise, filled. Sold them back 500 at the close and kept the other 500. Also added 300 in my wife's account at just above 107.
I hope that they have now rebuilt their inventory and will open this at 108 tomorrow.
All of these "shorts" are not really short the stock - it's too expensive. They're just gambling a few bucks on some cheap puts. I'm happy to note that they got whomped today. The puts for this Friday are collapsing - the popular 105's and 104's lost over half their value and will be wiped out tomorrow. More significantly, the Nov 22 puts, where the real action is, are also plummeting. Today, the most active puts lost between 12% and 20% of their value. Leverage is a wonderful thing.
Yes, the MM's, will be selling this to you tomorrow at 110, I believe. The Nov22 110 calls are moving up now. And the put options for tomorrow are getting wiped out, which, in itself should carry this higher.
Yes, the MM's are buying back the shares they sold you at 114, and they're buying them back at bargain prices. Today, they are pinning it at 107, essentially with an endless buy order at 106.95 and an endless sell order at 107.05. However, I believe that at some point today.they will turn the "sell" switch off on their little black box and this will charge up.
The key will be whether Xtandi is gaining a foothold with unrologists in the prechemo setting. I believe that flagging Zytiga scripts - particularly new prescriptions - are clear evidence that this is the case.
You are buying the conclusion the MM's are selling. Meanwhile, look at the price of the put options deteriorating - not just Friday's, but the Nov 22'nd ones as well. I advised one of the shorts here to unload those puts yesterday, since that will prove to be their high point, I believe.
Well, I overestimated the depths of their perfidy, but the technique is the same: Arouse the daytraders by painting the tape in the premarket, sell them stock at 107.50, then buy it back from them at 106.50. You know it will close above 107 because that's where they had it pinned. I still say it will run up late in the session and close at 108 or above.
The problem here is that this is a stock which everyone knows is undervalued. Therefore there are few active shorts, and the ever hopeful longs are easy game. The reverse holds true for TSLA, a stock which everyone knows is overvalued and is heavily shorted. The stock thrives, as Amazon did for years, by repeatedly squeezing the shorts. This morning in the premarket, TSLA was initially up by about 10 bucks. Then the MM's took it down in steps just before the open, until it was almost flat. This enticed the shorts in, after which they ran it up in a flash, putting them underwater once again.
Those are tiny trades, usually of 100 shares, made by the MM's passing the shares from one hand to the other. They are almost always a headfake, designed to get retail investors to committ too early. Today this stock was crossing above 107 in the premarket, enticing the daytraders in, who ran it up to 108 quickly. Then it was dumped, taking out their stops. The MM's accumulate shares without driving the price up by using the hopeful retail traders to do the heavy lifting. A good rule in these cases is to put buy orders in where others have their stops. I do expect this to run up into the close today.
Here's my guess for tomorrow: they paint the tape in the premarket with little trades around 106.80. Then, about 15 - 20 minutes in, they administer the ritual dunking, probably taking it under105 and then holding it around 105 for awhile. Finally, about halfway through the session, they start to move it up quickly. It closes at 108. Just a guess.
Agree completely. The problem with this stock is that there are too many retail longs and not enough retail shorts. Last week those Nov110 calls were selling for over 6 bucks; now they're under two bucks. The weekly calls have obviously been wiped out. If I owned puts, I'd sell them right here and take the gift the MM's are giving you, because it will be snatched away very quickly.
Also note that one of the key items in the just-announced Republican agenda is a repeal of the medical device tax. Which suggests that they are not about to take on the pharma lobby.