Wednesday, September 29, 2010

ENDP Watch

Endo Pharmaceuticals Holdings Inc. (ENDP) is showing signs that, for the near term, the potential of a further rise has been used up. The stock gapped up by nearly 10% on Tuesday.

ENDP $32.92

In an analysis posted Tuesday I wrote: "A break below today's gap-day low, $33.03 so far, would be an exit signal. A pattern of lower highs and lower lows in the next few days would be a stronger exit signals."

I also wrote that most of the signal are invalidated by a gap of that magnitude.

Today, the price dropped below the gap-day low before retracing upward, but at this writing it is still below that low.

The most volatile signal -- the one most likely to recover quickly from a large gap -- is the fast stochastic, and it has moved into bear territory, although at a very shallow angle.

To me a nervous trader, who hates seeing paper profits crumble in flames, those signs say that its time to exit.

It may well be that the price will not drop lower, but the market is showing ambivalence about a further rise in the price, for the near-term at least, and I would expect a sideways or downward drift over the next few days or weeks.

With trading fees as low as they are, there is no big penalty for getting out and then getting in again if the trade was wrong.

Tim Bovee, Private Trader tracks the trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.


  • pps - Person's Proprietary Signal.
  • psar - Parabolic Stop and Reverse
  • ma20 - 20-day moving average
  • ma200 - 200-day moving average
  • macd - Moving Average Convergence-Divergence
  • sto - Fast Stochastic

About the glance: The colors indicate the state of each signal.

  • trend: Determined by the 5-day moving average, green for up, red for down, yellow for sideways.
  • sto: green for bull, red for bear.
  • sto zone: green for overbought (80+), red for oversold (20-), yellow for neutral zone
  • psar, pps, macd: green for bull mode, red for bear.
  • macd trend: green for rising, yellow for sideways, red for falling.
  • neutral.
  • ma20, ma200: green for above the average by more than 1%, red for below the average by more than 1%, yellow for within 1% either side of the average.

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