Protein
Design Labs Inc (NASDAQ: PDLI)
Market Call™ for January 10, 2001
Contributed by Mark Seleznov, TrendTrader.com.
The purpose of this Market Call section is to
educate readers in technical analysis patterns and indicators. As with all investment
information, you need to research information and consult your financial advisor before
initiating any strategies that are contained in Market Call.
Also, you must realize that as with all trading strategies,
opinions can change quickly depending on market conditions and developments.
This column tries to present historical examples, potential set
ups, and examples of entry and exit strategies.
Since the beginning of this year, Protein Design Labs, Inc.(PDLI) has been
hit pretty severely along with many of the other biotech stocks. It has
fallen from a nearly $90 dollar price level down to about $43, and has
recovered a bit up to 50 1/4 as of today's close.
I believe that we have a few different indicators showing a buy signal on
PDLI, but I would wait for a breakout through today's high of 52 15/16 for
my
final confirmation and my entry point.
Our other confirmation of this is the MACD and MACD signal line.
The MACD is the difference between a 26-period and 12-period exponential
moving average. A 9 period exponential moving average, called the “signal”
(or “trigger”) line is plotted on top of the MACD to show buy/sell
opportunities. On the charts below, the MACD is the histogram, and the
trailing, slower moving line is the signal line.
There are three popular ways to use the MACD: crossovers,
overbought/oversold conditions, and divergences.
The most common use is as a crossover method. Using this interpretation,
the trading rule is to sell when the MACD falls below its signal line.
Similarly, a buy signal occurs when the MACD rises above its signal line. It
is also popular to buy/sell when the MACD goes above/below zero.
On PDLI, the MACD crossed over its signal line on Monday afternoon. It is
currently moving in an upward trend toward the 0 line and continues to move
above the MACD signal line.
With the breakout at $53, I would keep my stop at $51. If the MACD crosses
back over the signal line intra-day, this may signal an earlier exit point.
If the NASDAQ follows through with another up day on Wednesday, we should
continue to see upward strength in PDLI.
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Call Information
Mark A. Seleznov is a General
Securities Principal and Managing Partner of Trend Trader, LLC, a NASD, SIPC broker/dealer firm located in
Scottsdale, Arizona. A professional trader for over 25 years, Mark was a Market Maker on
the Philadelphia Stock Exchange, a Retail Registered Representative, and futures trader.
Mark is an author and recognized expert in equity Day Trading. He conducts seminars in
Equity Day Trading and offers his firm traders training and support. If his firm holds any
positions in the public companies he writes about, it will be noted at the bottom of his
article.
Market Calls is a daily syndicated column on trading by Mark A. Seleznov, Managing Partner
of Trend Trader,
LLC. For information on obtaining Market Calls for your web site,
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Disclaimer: Trading in securities may not be suitable for
all individuals. Consult your broker or other professional to determine your suitability.
This is not an offer to buy or sell securities. The advice given above is of a general
nature and should not be taken as a recommendation to buy or sell the referenced security.
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Last modified: January 10, 2001
Published By Tulips and Bears
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