Comments on: Genentech (DNA) Example: Longer-Term Trading

By: Setup on GOOG; More on StrategyDesk 1.0; Don’t Forget DNA • dummyspots.com

Fri, 02 Feb 2007 04:14:31 +0000

[…] Any other Jungle Book fans out there? Well, either way, an Elephant Never Forgets. Last November I wrote a couple of pleasant little articles on Genentech (ticker: DNA). In the first one, I noted that a break of the 85-86 area could provide an entry for longer-term, um, investors. (If you’re reading ‘em, check out the follow-up post, as well.) […]

By: Michelle B

Michelle B — Mon, 20 Nov 2006 13:57:53 +0000

Thanks for the AMGN/BIIB story. Wow!

By: Will

Will — Sun, 19 Nov 2006 23:40:20 +0000

Michelle - thanks for the tips! I think you’ve shined a light on an often-overlooked gold nugget: we all love to look backwards and see those big gains, but it does very little for our trading. Doing as you suggest and looking very closely at what happened just before the big gain is where much of the magic lies, and where many of us fail to focus (he said as he cast his eyes down and kicked the dirt).

Re: Ramper/disaster du jour - yah, acutely aware of these. I worked in drug research for a few years, and saw some, um, “curious” activities in “certain” companies’ stocks even during the “confidential” studies. Let’s just say that big gap on the day of the “news” is similar to a big gap on the first day of an IPO. The little guys scrambling to get in are buying it from someone who conveniently already owned it.

Also (not sick yet? how ’bout another freakin’ anecdote?), a good friend was an extremely successful Rep. for Amgen, and their monster Epogen was his bread and butter. Back in late ‘04, he left after many years, cashed out his company stock and loaded up on the stock of the company that hired him away. That was Biogen, and he was gonna head up the Tysabri team. Well, you know what happened with Tysabri. Friday 2/25/05 BIIB closed at $67 and opened Monday 2/28 at $37. He lost YEARS worth of income, and I think we nearly lost him.

Anyway, thanks as always for the visit and my e-door is always open for you and your insight.

By: Michelle B

Michelle B — Sun, 19 Nov 2006 08:52:57 +0000

Good stuff, Will. I am often asked how I learned some of the nifty things I know, and my response is that I let the market and charts teach me.

One trick of mine is when I locate a great pattern after the fact, I block out the move with a piece of paper or my hand, and I focus on the stock action before the move, the pattern and price action that triggered the move in other words. You get better and better at this the more you do it. You become able to discern the important clues, via candlesticks, volume, moving averages, etc.

It is possible to time stock moves on various timeframes even though some still say it is not!

One headsup with swinging biotechs, either long or short, is that they are often the infamous ramper or disaster du jour because of their propensity to have positive and negative news which could move them in a direction 35% to 75% overnight. DNA could move big overnight not only because of its own clinical trial news but also because of positive/negative news released by their major competitors.

By: Will

Will — Wed, 15 Nov 2006 18:06:15 +0000

Lloyd - (sorry about misspelling your name last time, it was late and I was goofy; I’ve fixed it)- I started a reply in the comments, but it got so long, I turned it into a separate post on the blog. Short answer, “All the free tools from Ameritrade.” I hope to have the post up later this evening.

By: lloydphilip

lloydphilip — Wed, 15 Nov 2006 13:49:32 +0000

Will,

Speaking of tools. What tools do you use to search for daytrading candidates? I cancelled my TC2007 sub. as I need to cut down costs so that I may be able to hang in this thing a bit longer and wait for the bulb to turn on. But now I am stuck without any potential candidates. I have Trade-Ideas but I know that I’m not using its full potential plus its not an end of day tool. I would like to do some end of day prep work for the next day.

Thanks,
LP

By: Will

Will — Wed, 15 Nov 2006 04:52:53 +0000

Lloyd- LOL! As my ex-wife used to say, ALRIGHT ALREADY! I just got to looking over DNA’s action and thought, “Hey, this thing makes some tradeable moves…” and then one thing led to another. One of the things I usually do when I’m narrowing down a list of swing or daytrade candidates is to delete any which don’t have a 52-week hi at least 200% of their 52-week lo. If I can develop the (very different) skill to trade longer timeframes and let the stops do the work just like on daytrades and short swings, I’m going to start taking some entries on these behemoths whose 52-week range isn’t quite as impressive.

Thanks for the comment!

By: lloydphilip

lloydphilip — Tue, 14 Nov 2006 23:39:34 +0000

Will,

Man did you leave out anything? Now I have to have this on my watch list.