|The question is always, "Is it worth investing in a company of hope?" Let's face it, most biotechnology companies spend millions of dollars on research, hoping to cure a targeted disease, produce a viable product, and bring in huge profits to the company. But remember that Viagra, which brought Pfizer billions of dollars, was found by accident. Pfizer marketed a blood pressure pill, and noticed that one of the side affects was... and this led to Viagra. How many other companies can be that lucky?|
|Well, MGI Pharma Inc. started showing life on June 23rd, 2005 at $20, having fallen from higher levels. Let's examine the chart.|
|Graphic provided by: MetaStock.|
|To analyze the chart I have programmed my preferred indicators into Metastock Expert Advisor. Now when I open the chart, the triggers are automatically launched. |
St = RSI stochastic
F = Fisher Transform
JM = Internal trading band
Darvas = the Darvas box trading strategy
(Formulas are available via email: email@example.com)
|I use the triggers as follows. I will buy/sell the stock on the Fisher buy/sell or RSI stochastic buy /sell, depending on which comes first. I will close out the position on a sell or on a stop-loss. |
I use the JM and Darvas strategies for long-term positions. Note that on July 5th the JM strategy gave a buy and this was confirmed by a Darvas buy on July 7th. A Fisher buy and a RSI stochastic buy were received earlier, but they were closed out on July 14th, the day after the trigger on July 13th, so they closed into a rising price.
The chart also shows a consolidation triangle, suggesting a target of $34.15 should the price break out of the triangle from the low of $26.20. (27.70 - 10.75 = 7.95 + 26 20 = 34.15). Of course should the breakout occur at a higher price from a higher low, then the target could be higher.
|On July 29th the Fisher Transform indicator gave a buy signal, so I would have bought for a short-term trade had I not previously bought the share on the JM or Darvas triggers for the long-term. I would now hold the share until either the target is reached, or a rising stop-loss is triggered. |
Finally, I have the RSI stochastic indicator on the screen... old habits of looking at indicators rather than triggers die hard.
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