ENDP and VRX

ENDP Breakout from Cup & Handle Again

ENDP broke through 18 today with a high of $18.10 so far.

blog endp break 6-6-2016

ENDP has set and broken out of two cups and handles with a third possible with a little imagination. The first one was the bottom and is signified by the 1-2-3. One is the bottom, two is the reaction bounce high and three is the second bottom, which is a higher high. The second cup & handle is 4-5 and 6. Four is the new high with five being the reaction low which probably started as the folks in at $12.75 taking their profit. Six is the new higher high and seven is the breakout over the previous high of $16.01. Although the new breakout high was only $16.05 resistance was $16.01 and was broken. Even a few cents tells you that the people wanting to sell in the $16.01 area have been used up.

blog endp break 6-6-2016

 

In this second chart you see the retracement off the breakout high and another little break above $16.01 and then a big break through the following day.

At the top of the chart ENDP breaks into the gap created on 5/6/2016 with a nine dollar gap down on that date. Once a gap is entered the stock wants to close it. The top of the gap is a $25.80 and my sell target is $25.00. There is tail resistance at $19.58 from a low in 2010 but with a P/E in the 3’s I don’t think that will stop it.

For me closing the gap is a relative thing. ENDP had a high of $96.58 and a low of $12.56. If this pattern appeared in the upper half of this chart I would have ignored it, but just a few dollars off the bottom is a completely different animal. I would place the likelihood of a fill here at 95% or so. Those are the kind of odds I like.

Good Luck to All

Dave C

P.S.

Valeant Pharma misses by $0.10, beats on revs; cuts FY16 EPS, revs guidance  (28.85)
6/7/2016, 6:06:26 AM ET
  • Reports Q1 (Mar) earnings of $1.27 per share, $0.10 worse than the Capital IQ Consensus of $1.37; revenues rose 9.3% year/year to $2.37 bln vs the $2.34 bln Capital IQ Consensus.
  • Co lowers guidance for FY16, sees EPS of $6.60-7.00 (Prior $8.50-9.50) vs. $8.51 Capital IQ Consensus Estimate; sees FY16 revs of $9.90-10.01 bln (Prior $11.0-11.2 bln) vs. $10.92 bln Capital IQ Consensus Estimate; Sees Adj-EBITDA of $4.80-4.95 bln (Prior $5.60-5.80 bln)
  • “The first quarter’s results reflect, in part, the impact of significant disruption this organization has faced over the past nine months,” said Joseph Papa, chairman and chief executive officer. “This has been a difficult period for Valeant and its stakeholders, and while there are some challenges to work through in certain business operations in 2016, such as our U.S. dermatology unit, the majority of our businesses are performing according to expectations. While we recognize that we did not meet the timeline for filing our first quarter results, with our filing expected this week, we will be current in our financial reporting. We have made progress toward stabilizing the organization over the past few months, and we expect to file our financial results in a timely manner going forward.”
  • Courtesy of Briefing.com

VRX and ENDP are both pharmacuetical companies that have been heavily beaten down. When VRX reported ENDP took a dive.

blog endp 60 min 6-8-2016

This is called a sympathy trade. I don’t care how good you think you are sooner or later you’re going to get caught holding a stock with bad news. I had a small position in VRX in one account  and a medium postion in ENDP. VRX I added to at $23.00 and just sat on ENDP because it didn’t fall far enough.

The only reason I can add to this trade is that I am not overloaded with shares and I was in at a good price to start with.

Between VRX (down 6 bucks )and ENDP (down $1.80) I was down $3500.00 the morning of the report. At the end of the day I was down $200.00 and will make money on both these trades.

I’m posting this because ENDP went south as I was writing up a post on the great reversal it was in the process of executing. Nobody is bulletproof but if are in there right and haven’t overloaded yourself  with just a little thought you can salvage what would have cost me money a few years back.

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