Discovery Partners International (DPII)

Company. Discovery Partners "offers integrated services, products, and systems that span the drug discovery continuum, including target characterization, targeted and screening-library design and synthesis, high throughput and high content screening, lead generation and optimization, gene expression analysis, and protein crystallization." (company website) What that means, according to CBS.Marketwatch.com, is "develop and sell instruments and associated consumables to pharmaceutical companies."

Buy. A little knowledge is a dangerous thing. I was very impressed by the jump over three days from less than $5.67 (close 4-Nov) to a high of $6.74 on 7-Nov, all on heavy volume. When the price retreated on Monday, I snapped up shares!

I expected the price to pull back a bit. I didn't expect it to keep on falling! I suspect that those three big up-days are what's known as a "climax top" and are really signs of exhaustion, not new-found life.

Sell. As DPII continued its descent I kept hanging on, hoping the price would rebound. In early December, it looked as if my hope was justified: in a week, DPII climbed back from $5.25 to $6.00. I ignored the increasing selling pressure (red -DI line) and the strengthening of the trend (rising ADX line).

Last Friday, the stock opened higher and then made a big drop, forming a "dark cloud" candlestick formation. I decided that if the price continued lower today, I would sell. It did. In fact, DPII opened a lot lower than Friday's close. I placed my sell order.

In accordance with my new selling strategy, I am going to use the money left from DPII to bolster positions in better performing stocks.