Traders Corner   35 comments

Did yesterday happen? Based on the S&P 500 technicals, it is hard to tell, since none of them showed significant movement. Based on the Bollinger Band width, we may be entering a period of lower volatility, as the BB’s continue to narrow. But I expect the sentiment to overrule the technicals this week, as the Yellen testimony takes center stage.

The S&P 500 levels to watch today:

UPSIDE: 1802 (20 day moving average), 1809 (50 day moving average), 1849-1850 (January’s high, December’s high and the all-time high), and 1869 (top of the Bollinger Bands).
LAST CLOSE: 1799, inside the 1798-1799 (2 data points) range.
DOWNSIDE: 1791 (February 10th’s low), 1784 (February 3rd’s high), 1774-1776 (2 data points and October’s high and the 100 day moving average), 1770 (January’s low), 1767 (December’s low), 1758 (February 4th’s high), 1755 (February 5th’s high), 1752 (February 6th’s low), 1746 (November’s low), 1743 (February 4th’s low), 1741 (150 day moving average), 1735 (bottom of the Bollinger Bands), 1739 (February 3rd’s low), 1737 (February 5th’s low), 1729 (September’s high), and 1712 (200 day moving average).


Posted February 11, 2014 by edmcgon in Daytrading, Investing, Market Analysis, Technical Analysis

35 responses to “Traders Corner

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    • Ojunker,
      I’ve seen several charts like this over the past few years, and I rate them as “interesting coincidence”. That said, I wouldn’t be surprised by a large drop.

    • My favorite response I have read to the chart is a mathematical response:

      Very irresponsible use of deliberately manipulated scales. Note: If the parallel continues, then where the 1929 market lost about half it’s value, the current market would lose about 10%.

  1. Hi Ed, any news on NNVC? Is this a time to buy more or is something ominous brewing?

  2. Strange to see SLV up a hair yet AGQ down a hair, no?

  3. Gad – terrible news for those of you in NNVC. Good luck to all.

  4. What do you guys think about PDLI???

    • Ted – I have looked at PDLI several times. They appear very cheap and pay a nice dividend. But my understanding (and the reason I have not bought them) is that their earnings are not sustainable. They are getting pretty rich royalty checks, but in a year or two those will end and I am not use where their income comes from after that.

  5. My eighth largest holding, RPXC, reports tonight. They have been a subpar holding for me. My basis is 16.36 and they are trading at 15.43. They are an interesting company, kind of a patent facilitator for Silicon Valley. They help firms create portfolios of patents to protect them selves. They also act as a middle man between tech companies and companies owning patents. S their capital costs are pretty low. They have a good balance sheet. And for better or for worse, intellectual property seems like a growth industry.

    • RPXC earnings felt a little bit disappointing. They missed by a penny or two and revenue guidance for 2014 seems lower than street expected. May drop a bit tomorrow. Still, by most metrics they are a cheap stock and they are growing the top line (6%) which seems like a rarity today.

    • So Marshall, what are your thoughts on RPXC earning. Looks like they had a small miss but revenue is a little higher than expected and guidance looks to be increasing?

      • Jeff – I like the stock. Not super sexy and may take some patience. I think people who want in will have many decent entry points during upcoming quarter.

      • Sorry, our posts must have crossed in cyberspace. Thanks for your thoughts.

      • Jeff – as I read further, I am less enamored. Even though they are forecasting a 6% revenue increase! they have earnings per share (non gaap) pretty much flat with 2014. Perhaps they are being conservative, but I find that pretty unexciting. My rule on this stock is to hold for a year, so I will be patient and wait. But I would not advise new positions unless it drops significantly.

  6. NNVC’s response:

    NanoViricides responds to ‘baseless and inaccurate’ Seeking Alpha article; says ‘We are outraged at this unfounded and intentional attempt at deflating the Company’s stock price’ (shares halted) (NNVC) : Co responded to a baseless and inaccurate article posted on Seeking Alpha, a stock market analysis website, which obtains content from its members.

    The article was filed anonymously by a person who identifies self as being short on NNVC stock and calls self “Pump Terminator”. Clearly the person has vested interests. The article refers to a “Whistleblower Document” and “Smoking Gun” as the source of the information posted in the article. The source document is a serial complaint filed by a single shareholder in the United States District Court of Colorado, a complaint which the same shareholder brought three times in Nevada state court and which was dismissed twice and which has been amended a total of seven times. The Colorado Complaint had been previously dismissed and NanoViricides has moved to dismiss the current complaint again. Noteworthy is that the Plaintiff’s attorney has asked the Colorado court to withdraw from the case.

    Moreover, as it has done on each filing of the complaint, the Company denies the allegations in the complaint as well as the factual inconsistencies in the article. Each and every alleged covert and self-serving action was undertaken in compliance with all appropriate legal and disclosure requirements. Each transaction was believed to be fair and in the best interests of the Company’s shareholders and reported by the Company in its filings with the Securities and Exchange Commission. In addition, the Company is always mindful of its expenditures and believes that the compensation paid to its officers to be reasonable and its costs to have been immensely conservative given the number of drugs the Company has developed in its pipeline.

    Dr. Seymour, the founder and Chief Executive Officer of NanoViricides, stated, “We are outraged at this unfounded and intentional attempt at deflating the Company’s stock price. We will have a more detailed response, in the near future, once we determine our options, including all legal action to determine the identity of the author, but we want to assure our shareholders and the market that the Company’s purpose is the same as always – to eradicate life-threatening viruses and increase shareholder value.”

    Dr. Diwan, founder, President and Chairman of the Board commented, “This is a shameless attack from someone who neither understands the science nor the development work that has gone into nanoviricides drug candidates. With very little money we have built a rich pipeline of drug candidates that are now getting closer to the clinic. I have personally taken high risks in making certain that the Company can continue to advance by undertaking the building of a highly specialized cGMP manufacturing facility at a time when NanoViricides did not have sufficient funds to be able to commit to this critical venture. All of the biological testing of our drug candidates is conducted by third parties. We are very happy to note that our drug candidates have been found to be safe and highly effective, and therefore worthy of clinical development.”

    From Yahoo Finance:

    • if this is true, then maybe the shares will go back up “soon”. I like the fact that the company came out against this article. It is so ridiculous that a single baseless article can cause a stock to go down over 30% in a day. A few weeks ago Adam Ferguson wrote a piece for PVCT and caused that stock to go down big.

      • ted,
        There is a valid difference between the 2 pieces. Ferguson wrote his piece for The Street. If Ferguson wrote something which was wrong in the libelous sense, The Street could have been sued for it, and possibly investigated by the SEC because of the impact on the stock.

        This Seeking Alpha article was written by an anonymous poster. It’s about on the level of calling someone a jerk on this blog, except a lot more investors read Seeking Alpha.

        In reading the 2 articles, the SA piece struck me as a bit more written to appeal to emotion, whereas The Street piece was a lot more rationally written. Admittedly, that’s my subjective opinion.

        NOTE: I am NOT saying the SA piece was wrong. But it was obvious the guy who wrote it has some money riding on it.

      • I didn’t read the Ferguson piece so can’t compare the two. But I perused the Federal Court Complaint to which the SA article was linked, and the response from the accused (“we filed all disclosures required by the SEC”) is so lame as to make me think on this one, where there is smoke, there is fire. In particular, where on dude controls two companies that cross-deal, and only one of them is accessing the public securities’ markets, it’s a certainty which of the two companies is getting the better deal. And it ain’t the one in which the puppeteer is the diluted shareholder with a fractional interest at the expense of the company in which he has complete control and most of the equity.

        Doesn’t take a phD in molecular biology to figure that one out.

        I love the “we thought it was fair” line- “Each transaction was believed to be fair and in the best interests of the Company’s shareholders and reported by the Company in its filings with the Securities and Exchange Commission.”

        I’ve never met anyone yet that wasn’t absolutely certain he’s the most fair guy on the planet.

        This was a pure gamble from the first bet. Anyone really think they know enough about the drugs supposedly in the pipeline that they can make a half-ass informed decision? Ed, thank your patron saint tonight that you rolled your point enough times to not lose our shirt, got out early and made a handsome profit. No reason to return to the craps table on this one.

      • Ted, Before doubling down from your first purchase you might want to review some of the SEC filings revealing Mr. Anil’s open market transaction in the stock. He was buying in February and selling in October. And that’s only based on one filing I saw.

      • BB,
        I don’t disagree with you. And I am certainly NOT recommending anyone buy NNVC at this point. But I also want to hear the company’s formal response.

    • picked up some @3.57

  7. So based on that are you a buyer? Feels too speculative for me. I have seen this play out too often. A times, the short sellers claims are refuted and this is a great buying opportunity. A other times, there is smoke with the fire and the stock eventually craters. We, as uninformed investors, really have no way to distinguish.

    • Marshall.
      I haven’t actually made a judgement call on it. I only posted that as information.

      Truth be told, I agree with the Seeking Alpha article on one point: NNVC is overpriced. This is still a development stage biotech which has been run up way too much. At best, I would rate it as a “hold”, pending the company’s formal response.

  8. wow, 50 day MA was taken out with nary a breath. Trader, does this portend a retest of the recent highs?

  9. Maybe. We need to see if it holds above that level. If it stays around the 50 day for a few days and then moves higher, we should move to a least the old highs.

  10. I heard some market traders last week who said that downdraft in the market was not the really correction. What was needed was a market blowoff where stocks rallied hard and fast suckering in more people. Then after the market blowoff would come the really correction….this week may be setting up for that top.

  11. Ed,
    Are you thinking of giving up on SPXU and SQQQ?
    I have definitely been on the wrong side of one of these short term trades. Tough pill to swallow if you sell but not sure anything but hope underpins the market falling significantly at this point.


    • Robb,
      Any time I take a loss on a position, I think about selling it. It’s a natural reaction. “Make the pain stop!” 🙂

      Then I realize: Stocks were overvalued before the recent drop. Here we are, returning to the same overvalued prices, in spite of the fact the earnings reports weren’t good, the last 2 employment reports stunk, and the Fed isn’t changing policy.

      Truth is, I see more upside in the downside, from a value perspective. The markets are partying like it’s 1999, and we all know how that ended…

  12. GTAT @ 10.90. Sold Feb 21 11’s at .40 which will be 4.5% in 8 days if called out. Playing the momentum here.

    Thought about selling the March 11’s for .95 but I just love getting more than 4% for a less than two weeks work(if it goes my way)

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