HDY: Not Making New Highs

On HDY- the stock is not trading to new highs on Friday news, which to me is a short term technical negative, and a major positive to those who don’t own the stock and are looking to get in like myself. If I were a shareholder, I would swell 1/2 now.

NightHawk Hits Stop Loss

When I wrote my edition on setting your stops against what could be a very difficult market through the summer, I set the stop loss on NIHK at $.09. The stock doesn’t look like it wants to collapse below that level, but nevertheless if you want to protect your principle, you should consider selling.

Here’s a chart:

Technically, I would like to have seen this stock hold the $.11 mark. That represents the 61.8% retracement level from the move up which began in early February.

A wise man once said ideas are plentiful, capital is scarce. Setting stop losses is tricky business. There are a million different theories on how to do it, and it is up to each individual. I set mine from a technical perspective. If an uptrend has changed to a downtrend, I sell and take my lumps. Others may choose to use a percentage. If you like the percentage method, I believe the percentage stop loss should be higher with a riskier stock.

Nevertheless, $.09 seemed like a reasonable level to me. It gave us a 20% cushion against the 61.8% retracement level. However, if you are a long term investor, and want to hang around in this one until sales start materializing from the Verizon relationship, please do so. On the plus side, the stock has been coming down on relatively light volume, so a news related volume surge should put this one right back to a reasonable level. 

Dexcom Gives You One More Shot

After last week’s exciting surge, DexCom has pulled back, offering investors what I hope will be one last shot at accumulating a position in the stock. Here’s the chart:

On a short term basis, the stock is telling me the ideal level to pick it up would be around $18. That’s a perfect 61.8% retracement of the last surge. The last time I excercised this disclipline, I picked the stock up at $16.80, within one penny of the retracement.

I am very confident this is a great buying opportunity, not a forecast of a negative event. I am letting volume be my guide. Note the circled volume bars. Here’s the important point- look at the huge difference in volume on the way up than on the way down. Therefore it is under accumulation by the bigger money.

Based on analysts reports I have read and the way the stock is behaving, I believe the FDA Approval is imminent. If you aren’t on board or want to add to your position, I hope this is the last chance.

Comments and questions are welcome.



HDY Chart Offers Insight

Lots of recent comments on CEO Watt’s current trip to Guinea. If you follow the situation, you should recognize the recent run up in the stock in advance of Friday’s news about his trip to Guinea were likely related.

However, I am a big believer that sometimes the way a stock behaves tells you more about what’s really happening than the company does.

I was late to the party on the last surge, and stuck flatfooted with no shares. The way the stock is behaving, I believe it is likely I’ll still be able to pick it up cheaper once again.

Here’s a current chart:

The horizontal blue lines represent the levels the stock achieved on each of Watt’s trips to Guinea. In January, the stock hit the $3.50 plus mark. On this last move, which incidentally happened before the news was announced, the stock only achieved the $3.00 level. With each successive trip the high in the stock is getting lower, meaning the market is getting less excited about the prospects for obtaining the drilling permits.

This process seems to be taking forever. My guess- they will close the deal sometime approaching summer. However, it could happen tomorrow for all I know.

Just on pure instinct I believe I will still be able to buy it cheaper. I’ll be taking a hard look between $2 and $2.25 this time around. I am running the risk that I will be out if they sign the deal in the near term, but it’s a risk I am prepared to take.

Comments and questions are welcome. There’s a few who think I’m nuts for being out for now. A wise man once said “Ideas are plentiful, capital is scarce”. Nevertheless, in or out, I hope this company becomes wildly successful.


Dexcom Trying For New All Time High

I hope you own Dexcom, because the stock is behaving like the big event is imminent. As I write today’s BLOG at about 11:30 Pacific Time, DXCM is trying for a new all time high. It’s only traded its average daily volume, so there is clearly little or no stock available on DXCM.

The analyst reports I have read indicate the FDA Approval is expected sometime around the end of March. The stock is trading up in advance of the big event.

Here’s how the current chart looks:

The blue line represents the all time high. $19.43 was the previous high back at the end of January.

Here’s how I’m planning on playing this situation. If the stock trades up into the low to mid 20′s prior to the news of the FDA Approval, I plan to sell half in advance of the event.

It the stock stays around or below $20 in advance, I will simply hold for the big event.

Either way, on the day the FDA Approval is announced, I expect a breakaway gap, followed by a severe and significant pullback. I might even go short a couple of thousand shares. I have learned from experience that every time a stock trades up in advance of a big event, it pulls back after the event is announced. I hope I am quick enough and skilled enough to trade out of it when it happens. If I miss the open that day, I could miss the trade a give back a lot of profits.

If the company is declined by the FDA, I expect to lose a whole bunch of money.

Currently, I am holding 7,000 shares with an average cost of $14.71 in my account.

If you don’t own a little DXCM, you might be missing an outstanding opportunity. Comments and questions are welcome.

HDY Has Huge Day: Game Back On

Friday was a huge day for HDY shareholders. I’m sure there are plenty of you who want to stick it to me for currently being on the sidelines. Feel free- as I have previously written, I knew I could end up with egg on my face as the stock traded up. One facial omelet- coming up.

I case you are wondering, there is an unconfirmed rumor that one of more of the senior management at HDY is back in Guinea. I don’t know if this is the magic trip, if it fact it is happening, but the market sure liked the possibility to the tune of 1.2 million shares and a nearly 30% move on Friday.

I believe this stock is becoming a traders darling. After all, how many stocks make 30% moves in one day with a fair amount of regularity.

So, what to do now. I would imagine the stock will go up on Monday, and possibly for a couple more days before giving back some ground.

Unless of course the company announces it has the drilling permits.  Then it will continue climbing the charts, and the egg will spread far beyond my face.

So, here’s a chart, but it’s probably premature to even look:

If the stock starts coming back a little, you might look at $2.55 as a first level to pick some up, then really load up if you see $2.36.

If it doesn’t gap open on Monday morning, I might just pick up a 25% position as insurance against being out of a really big move.

Comments are welcome. Go ahead- lay into me- I can take. I was wrong, and have been wrong plenty of times in the past.


Callisto Correction

The powers that be reviewed my headline and content from this past Tuesday’s edition on Callisto Pharmaceuticals, and we all agreed a correction is warranted as it gave a misleading impression of the company’s intentions for  Guanilib.

The headline stated: “Callisto Targets Colon Cancer”. This headline is somewhat misleading.

Callisto has not announced it intends to formally pursue  Guanilib as a potential therapy for Colon Cancer.  Guanilib has been found to have a possible positive effect on inflammation of the colon. According to the press release, the abstract that will be presented to the Conference on Digestive Diseases reveals the following:  the abstract will describe results suggesting that oral administration of Guanilib ameliorates inflammation in a mouse model of experimental colitis ”

It is believed  Guanilib supplements the absence of naturally occurring hormone  uroguanylin in the colon. Deficiency of this hormone is linked to the formation of polyps, which are in turn linked to the possibility of colon cancer.

Somewhere down the road, if Guanilib helps prevent the formation of polyps in the colon, it could have a positive  preventative effect on the likehood of colon cancer developing.

However, it is inaccurate at this time to state that Callisto is targeting Colon Cancer. Callisto is developing Guanilib as a therapy for a variety of other gastrointestinal inflammatory diseases including ulcerative colitis.

Comments and questions are welcome.

BPTR Provides Glimmer of Hope

BrandPartners was out with news pre-open on Wednesday morning, and the news provided a nice little rally for the stock on the best volume we have seen so far this year.

The company announced it had signed $4.5 million in new contracts. While this is nice news, it is actually fairly routine for BPTR. I scanned the news release, looking an indication some of the news business was for Graffico or BPTR Europe, the two cash drain divisions on the company.

As it turns out, Graffico did contribute a part of the new business. BPTR Europe was not mentioned, much to my disappointment.

However, there was one unexpected surprise in the news release. Here’s the text:

  “We are continuing to execute our growth strategy within our core business and anticipate stronger revenues and increased profitability in 2006,” said James F. Brooks, President and Chief Executive Officer of BrandPartners. “We believe our pipeline is strong as a result of our increased marketing efforts, so consequently we are focused on converting opportunities to bookings.”

Stronger revenues and increased profitability in 2006? I believe the phrase “increased profitability” is what the market liked.

The stock has now come a little off the $.40 bottom it had been camped on for the last month, albeit just by 10%.

Here’s a look at the chart:

To read the entire text of the press release, click here.

I have been looking for a signal to double up on this one. Here’s the way I am hoping to play it- I believe I will wait for the year end numbers to come out. I am expecting Q4 to be roughly akin to BPTR’s weak Q3 numbers.

I am hoping to see the stock swoon a bit on year end numbers, which I will view as a buying opportunity.

I am still holding 100,000 shares with a cost basis of $.60. I believe BPTR should get earnings traction again in ’06 and I want to double up. A little pullback on weak year end numbers could conceivably provide just the opportunity.

Comments and questions are welcome.

Out of HDY: Just Tank Baby

For those of you who are following this convoluted saga and have an interest, and in the interest of full disclosure, I sold my remaining roughly 5K shares of HDY today.

This past week’s shareholders’ meeting, coupled with the company’s inability to close the deal in Guinea, has caused a downturn in the stock. Since a month had gone by, the senior management went to Guinea, and did not come back with a signed deal, I decided it was time to get out.

I had been selling since the $3 level, but had held about 5k shares in anticipation of another hype news release with little substance which might put a temporary surge in the stock.  As we drifted back down towards the $2.20 level, my gut told me it was time to get out.

The company publicly telegraphed many signals earlier in the year that the Guinea deal was back on. It has been my experience that the longer these things take, the less likely they are to happen. Without the potential of the Guinea project, the stock isn’t worth much more than $.50 on its best day.

Now that I am out, the company will probably sign the deal tomorrow and the stock will rocket back up, but I don’t think so. If it happens I will be stuck with egg on my face.

However, I believe it is more likely that the price will continue to slowly erode.

If everything goes according to plan, I will take a real interest in getting back in when the stock returns to about the $1.60 level. This level served as support twice in December. The stock may want to gravitate back there.

As far as I am concerned, now that I am out the stock can just tank, baby. If it drops to my level and stabilizes, I will reload and pray for positive developments. In the interim I hope it doesn’t leave me in the dust holding nothing.

Comments and questions are welcome.