I’d like to thank everyone for the kind words. Mars, when I powered up and checked the market at 4:45 a.m. (west coast time) and saw DNDN trading above 18, I thought of you and would have loved to have had your advise right about then. I did end up selling 1000 shares at $18.65, which was higher than anything I could have gotten during market hours. I sold the rest at various levels, the last 1000 shares going at about $12.80 (which is probably the point I should have been thinking about buying it back). I’ve followed your trading, here and on Zeev’s board, for some time and resigned myself to the fact that I cannot trade that way. I move at a slower pace: my best trades are usually swing trades that take some time to develop. I was very successful with FRPT, particularly while it was still an OB stock. I was in it (and trading around a core position) from 3 on up.
Had things gone the other way with DNDN, I figured the stock might trade as low as 2, but with short covering, I figured I could get out at 3. I had traded a couple of times for a point, so with my final entry at just above 5, I figured my downside risk was somewhere between 1 and 2 points. I’d have been out somewhere in the neighborhood of 5 and 10 Gs, which is no real great shakes in my volatile accounts. I’d make it back eventually. I’d be interested to hear if others had a much different read than that. I was somewhat surprised that so few took the gamble.
Using a high of 18.05 (during market hours Friday) and a low of 3.57, I come up with the following Fibonacci retrace numbers: 38.2% is 12.52, 50% is 10.81, and 61.8% is 9.10. My best guess is it will go no lower than the 10.81 (or thereabouts).
The immediate risk, as I see it, is if DNDN decides to do a secondary before the 5/15 FDA meeting. Not to read too much into such a potential event, but that could indicate that they may not be so confident about final approval. A secondary after the FDA meeting would seem to be much more lucrative. Even with the terrific volume on Friday, I’ll bet there is still a lot of shares short out there. Experienced traders who got caught short would likely have doubled down Friday morning, trading in and out to get some of that back. There were probably a whole lotta people like me, willing to cash in their chips with this big gain.
The FDA, by orchestrating the final question put to the panel, indicated to me that they would like to approve this drug. My wife disagrees. She is much more savvy on this sort of thing than I am, but as I see it, the FDA cannot lose. Since the panel unanimously agreed the drug was “safe” what do they have to lose from approving it, even if it eventually proves to do nothing?
There is a precedent with the approval of Elan’s Tysabri last year. ELN was allowed to reintroduce Ty with a stiff warning label. I could see something similar with Provenge: some sort of warning that the drug has not been conclusively proven to be effective. The lesson we are starting to see here and which will undoubtedly be useful for future Biotech trades is this: the FDA is willing to err on the side of compassion as long as potential harm is minimal.
As far as trading goes, could be a nice buy and hold up to mid May. Depending on how high it goes, “sell the news” could be the order of the day at that point unless you are in for the long term. Might be a good time to get puts.
Don’t know if I will buy or not. I’m just putting this out there and hoping someone else will chime in. This is as far out on a limb as I’ve been on a message board, but with all the wonderful trades I’ve seen here, I thought I’d give you guys my best.
Jay
