Based on the action seen this past week, it seems safe to assume that the recent low at 3.15 is likely to be a bottom to this downdraft.
As such, based on the charts, I will be looking to purchase VG between 3.26 and 3.30.
BRCD has built a strong rounded bottom formation over the past 12 years, having seen a high of 133.78 in the year 2000 then dropping down to a low of 3.59 in February 2003, then a low of 2.05 in March 2009 and a low of 3.18 in August 2011. Rounded bottoms are the strongest kind of base building as they suggest the company has gone through a major fundamental change over a long period of time which is always necessary to be seen after such a huge drop from $133 to $3.50.
During this period of time, the stock had built the top of the long-term trading range at the $10 level with a high in 10.58 in March 2007 and a high at 9.84 in October 2009. As such, the $10 level has to be considered the pivot point in the trend.
The stock broke above 10.58 in March of this year but evidently the fundamentals were not just quite right yet as the breakout was negated just a few weeks later and a drop down to the $8 level occurred. Nonetheless, no support of consequence was broken on the way down and the correction seen was probably mostly technical in nature since the stock had moved up from 5.31 to 10.96 without any kind of correction being seen.
The stock is now rallying back and 2 days ago saw a high at 10.40, which does suggest the stock is ready to break out again soon. The 10.96 intra-week level is the last resistance left (10.50 on a weekly closing basis and 10.84 on a daily closing basis) and if the bulls are able to get above that level, the stock is likely to run to the upside with $14-$15 as the first objective. Nonetheless, a breakout of this level will probably generate a run up to the $36 level over a period of 6-12 months with some resistance also being found at 25.00.
Support is now pivotal at 8.89 so any purchases made should use an 8.79 stop loss.
I appreciate your response but chart-wise speaking I have it clear. I am a very experienced and knowledgeable chartist with 37 years of experience and having been a chart analyst for Prudential Bache in the 80's, I am able to make good chart evaluations.
Nonetheless, as you know the bottom line is always fundamentals and based on what has happened chart-wise to this stock, it should not be back at these levels at this time.
It still has not done anything that is truly negative but there must be a fundamental reason why the stock has not yet fulfilled its chart outlook and that is what I am trying to uncover. Why this company is falling behind. It is the competition? Is it the industry that is failing? Is it the company that is not moving forward as it should be?
That is the kind of information that I am asking for.
I am a chartist and I looked at this chart for the first time yesterday and there are some powerful chart reasons to be a buyer anywhere between 3.08 and 3.15.
The 200-week MA is currently at 3.08 and that line is alwasy very important. The line first got broken to the upside in June 2010 and the stock rallied up to 5.39 where the selling appeared that took the stock back down to the line, at that time at 2.00, and below the line for 15 weeks before the line was broken to the upside again and a rally up to 4.94 occurred.
During the last 2 years the line has held strongly even though it has been seen again on 4 occasions and this time will be the fifth occasion. Simply stated, the 200-week MA has shown itself to be very important.
My question is as follows, "what has happened fundamentally over the past 6 months that has caused the stock to come back down to this line?"
Though the line is considered decent support, the reality is that coming back down to the line now when the indexes have continued to move higher this year is a bit of a negative and I want to get an idea of why that has happened.
Please, only responsible replies! BS is useless as I can smell it a mile away.
Just a short update:
The stock has now generated 8 red weekly closes in a row and the probabilities of a green close next Friday are high, especially since the stock closed slightly above the mid point of the week's trading range, suggesting a higher probability of next week going above this week's high at 4.53 than below this week's low at 4.18.
The upside objectives remain the same with 4.75, 4.86, and 4.99 as the likely objectives. Nonetheless, the probability is that the stock will get up to 4.75 and no further.
Nonetheless, the bulls have accomplished nothing positive, in fact today's close here at 4.39 has now built a triple bottom on the weekly closing chart, increasing the chances that it will be broken within the next couple of weeks since multiple bottoms rarely hold up.
The indexes will be rallying next week based on Friday's action and though I do not know how much of a rally to the upside will be seen, I don't believe it will be much, meaning that ARNA will not be getting a lot of help from the overall market.
I continue to believe that ARNA is heading lower but for the next week or two it could move up a bit to the levels mentioned above.
That is what the chart is saying.
I have to laugh at the fact that the 2 posts that I have placed here have had 10 times more Thumbs Down than Thumbs Up. It is par for the course since real but negative information is usually not appreciated. People like to dream and support those that nurture those fantasy's.
Unfortunately trading the stock market requires real money and losing it hurts. Fantasy dollars cannot be spent.
I still remember the first time I went to the IV ARNA board in July of last year when the stock was trading at 7.30 and "stated" that the stock had broken important support and was likely headed to the 200-week MA, at that time around 4.35. I was dissed, laughed at, and ridiculed and certainly got 20 times more thumbs down than thumbs up. Lo and behold the stock dropped to the 200-week MA and every critic had their mouths agape that I had predicted it would happen and that it did.
I did get a lot of Thumbs Up when I said the stock was then going back up to 7.50-8.00. I did get quite a few Thumbs down when I said the market was heading back down to the 4.70-5.00 level but not as many as the amount I got in July.
Bottom line, everyone of you bulls have been spinning your wheels for the past year and your money has not been working for you, in fact it has been working "against you". The subscribers of my service that followed my mentions made $7 per share profit on a $7 stock in less that 10 months.
Keep on laughing, you are only hurting your own pocketbooks.
Let me state it unequivocally.
Fundamentals are the basis for any stock. Charts only show what the players in the game are doing and then only for a short period of time.
Nonetheless, the "real" fundamental picture is not always known by the public. Thousands of cases have occurred where the fundamental picture was different than what everyone believed it was.
Secondly, fundamentals are usually in play only a few times a year (earnings and news events). The rest of the year the traders are simply trading a stock from Point A to Point B (support/resistance) just simply to make money every day of the year. Most traders are NOT interested in the fundamentals, they just want to make money every day and use all the tools they can to accomplish it. Try buying into a computer related selling spree, you will find yourself underwater fast.
Last but not least, a lot of stocks, especially biotechs like ARNA is, are difficult to measure the real value of the stock. With no tangible assets, mostly losses, and an uncertain future, the price of the stock is speculative. Can you make a clear fundamental case for this stock being valued at $2, at $4, at $6, or at $8? No, you can't.
Most of you based the valuation on where the stock was previously, what has happened in between, and where it is now. Simply stated, if things are better than last year the stock should be higher than last year. False! because last year's price was not established as true value. ARNA traded as high as 20.67 in 2006. You mean to tell me the company and the product was better then than now?
This is what you guys have to learn, especially when trading biotechs. A GE or a WMT has established value due to inventory, profits, costs, etc. ARNA has no such thing.
ARNA has closed the gap at 4.20 and that is a big negative since the gap was generated off of a better than expected earnings report in November and even a much better than expected earnings report that came out last week has caused the stock to go down to close the gap instead of rallying.
As such, the weakness is unexplainable and suggests some problems exist with either the company, the management, the product, or the demand for the product.
The bears are in control right now and the bulls on the defensive without any fundamental reason to buy at this moment. The stock is trading well below the 200-week MA, which is a long-term negative that has not occurred to this degree since 2012, suggesting that the traders are now uncertain about the long term prospects for the stock.
Even though some buying could be seen here between 4.05 and 4.20 for a short-term bounce and a rally up to 4.75, it is likely to be short-lived and perhaps not even happen since It doesn't make sense for the bears to let the bulls build a double bottom. The momentum is to the downside, the gap that was supposed to be a sign that the stock had bottomed out in November has now been closed, and technically speaking the bulls have lost their "mojo".
I am now even more convinced that the 4.05 level of support will be broken, either now (more likely) or after a small rally, and that the bears will shoot for the 3.57 level that would suggest a 10-year rounded bottom is being built.
Sorry to be the messenger of bad news but this is not an opinion just a chart evaluation based on my experience of technical chart trading.
You are right. I did buy the stock at 4.82 and sold at 4.60. I forgot about that one. I apologize for the faux pas. It was not an intentional omission.
Anyone who talks without knowing the facts or even asking for the information is just someone that is blowing wind through their behind trying to be seen and heard. I generally put those kind of people on ignore since they have nothing of value to say. Assumptions are for critics and fools. .
I don't know if this 4.60 question was meant for me or not but I did not sell or short at 4.60. My last trade was to get out of a long at 5.16.
Trading is not about being right or wrong but making more money than is lost. I take a lot of losing trades all the time because I use close stop losses at levels of support and/or resistance if short. When I am wrong my losses are always small. by the same token I used at least 4-1 risk/reward ratios that are based on support/resistance level (not on money) and that means that I at least have a good shot to be right because other chart traders are doing the same thing at the same price.
If there is a change of fundamentals or something happens to upset the chart, the loss will be small. When right though, the gain will be at least 4 times what the loss was. With this approach I could be wrong as much as 80% of the time and still break even or turn a small profit.
To answer another question that often pops up "what do you do if an earnings report or a bad piece of news comes out that causes the stock open below your stop loss level?" and the answer is simple "I diversify into 6-10 stocks and never have more than 15% of the portfolio in any one stock, meaning no stock can hurt me much. By the same token, being diversified means something unexpected positive can happen as well.
Like I said, chart trading is about making more than is lost, not about being wrong or right.
then explain to me why this stock dropped from $8 to $4 last year and once again dropped from $8 to $4 this year. The company is a different company than it was last year.
Great financial plan. Keep your money idle for months and perhaps even years hoping that nothing negative (such as bad management or competition) comes up to derail your home run dreams.
I would rather be trading whatever stock is hot...or cold to the downside, and have my money working for me all the time.
I remember I traded a stock called SNDA 18 times in 1 year. The stock was bullish and it did go up from $21 to $28.50 during those 12 months. A person like you that held and waited would have made 33% on their money with a $7 move per share on their investment. I made $33.50 per shares that year trading the stock 18 times with most of the trades on the short side. That is what a trader does, uses his knowledge and money to make as much as he can. He just doesn't sit there and hope that the stock goes up in the run.
Lots of people did that before 2008 and lost as much as 90% of their capital that year. Great plan.
Been Trading ARNA since July of last year and have been commenting on the ARNA board on IV. Said ARNA was going down to $4.50 when it was at 7.30 and made $3 on the short side. Bought ARNA at 4.30 and stated it was going to 7.50-8.00 and made another $3 to the upside. Bought ARNA again around 5.75 and got out at 5.19 and now I am looking to buy again around 3.50.
I am also here because I sell my service and maybe someone is interested in good chart information.
But the results do! Keep on trying to tear me down. Better than you have tried and failed. You cannot argue against results in a business that is all about results. Words are cheap, a bit like you I guess.
Weekend Chart Update
DD had a negative reversal week, having gone above the previous week’s high and then closing below the previous week’s low. The stock closed near the lows of the week and further downside below last week’s low at 63.70 is likely to be seen. On an additional negative note, the stock broke below the 200-day MA on Thursday, currently at 64.75, and confirmed the break with a second red close on Friday. By the same token, the bulls were not able to close the stock below the 50-week MA, currently at 63.70, meaning that the door is still open for a reversal of fortune this coming week if the bulls are able to close the stock next Friday in the green and re-establish the stock above the 200-day MA. The stock did rally from the lows of the day on Friday and closed in the upper half of the day’s trading range, suggesting the first course of action for the week will be a retest of the 200-day MA at 64.75. What the stock does at that line is likely to set the stage for the rest of the week. Probabilities still favor the bears but there is a window open for the bulls to “pull a rabbit out of the hat”.
Do with the information whatever you decide to do. Nonetheless, let me give you some pertinent information.
I was a broken/trader for Merrill Lynch and Dean Witter for 5 years and broker/trader/chart analyst for Prudential-Bache, all in the 80's. I have been trading off of charts for 37 years and have learned all my lesson by paying dearly with blood sweat and tears.
I have been back trading my own account since 2005 and now live off of it totally. In addition, I started a chart service in 2007 and have a pretty good track record with "public" mentions "before the fact" since January 2007 (see below), meaning that I do know what I am talking about.
Chart evaluations are not something all that dependable since it is mostly a study of what has happened in the past and from that attempting to see what will happen in the future. Nonetheless, charts are more often right than wrong since they do reflect what the "big money" is doing and the big money usually has more fundamental information than you or I will ever have.
Anyhow, here is my "official" track record of all the mentions given over the past 8 years.
Status of account for 2007: Profit of $9,758 per 100 shares after losses and commissions were subtracted.
Status of account for 2008: Profit of $14,704 per 100 shares after losses and commissions were subtracted.
Status of account for 2009: Profit of $7,523 per 100 shares after losses and commissions were subtracted.
Status of account for 2010: Profit of $24,045 per 100 shares after losses and commissions were subtracted.
Status of account for 2011: Profit of $3,616 per 100 shares after losses and commissions were subtracted.
Status of account for 2012: Profit of $3,399 per 100 shares after losses and commissions were subtracted.
Status of account for 2013: Profit of $15,886 per 100 shares after losses and commissions were subtracted.
Status of account for 2014, as of 5/1
Profit of $15714 using 100 shares per mention (after commissions & losses)