ArQule (ARQL)

Company. ArQule "is pursuing a strategy to become an efficient drug discovery and development company. The Company provides high quality library design and compound production to pharmaceutical collaborators." (company website)

ARQL stock chart
loss Bottom line
-20%

Buy. I bought ARQL after two days of huge gains on heavy volume that brought ARQL from $4.75 to $5.50.

Should have known better! Sure, the ADX line was rising sharply. Sure, there had been a steep rise in buying pressure (green +DI line) and a corresponding decline in selling pressure (red -DI line). Sure, the Chaikin oscillator had crossed over the zero line.

The problem is, I bought on a day when the stock opened lower, traded much higher, but ended the day below where it started, all on higher than average volume. In short, the stock had just moved too far too fast.

If any more evidence were needed, the following days provided it:

  • 14-Oct: up day, but still closed a long way from previous day's high
  • 15-Oct: opened higher, but then fell to close lower than the previous day
  • 16-Oct: opened lower, and continued on down
  • 17-Oct: opened lower, but climbed back to previous days open
  • 20-Oct: opened lower still, made highs equal to the previous day, but closed almost where it started
  • 21-Oct: modest up day
  • 22-Oct: big down day
  • 23-Oct: gap down to open, followed by big volume sell-off

So, eight days after buying I found myself in the hole 17%; the ADX line had declined precipitously; and selling pressure (red -DI line) was higher than buying pressure (green +DI line). Deep in denial, I ignored all that, and held on to the hope that "it might go back up again."

Sell. Newly enlightened about selling, I decided to bite the bullet and sell. Today opened down, again, and I placed my sell order.

In short, ARQL (and CYBS, also sold today) stands as a lesson in when not to buy and how not to sell.

Ouch! Let this be a lesson to me!