CoTherix (CTRX)

Company

"CoTherix, Inc. is a biopharmaceutical company focused on licensing, developing and commercializing therapeutic products for the potential treatment of cardiopulmonary and other chronic diseases. Our business strategy is focused on in-licensing product opportunities that are in mid- to late-stage clinical development. Our in-depth understanding of the biology of cardiopulmonary and other diseases—combined with our management's development, commercialization and business experience—is highly advantageous as we continue to identify and acquire product candidates in our target disease markets." (company website)

Sell short

15-Apr-05. CoTherix has been in a clear downtrend since it peaked in January (see sidebar). In Friday's session CTRX bounced around from one extreme to the other but ended up just below where it started. With all that, it gained only a penny compared to the previous close. There was a fair amount of volume, but, with one exception, every other up-day when 50,000 or more shares were traded, was followed by further declines. I'm hoping that's the case this time as well. The trend (ADX) is strong and may even be gathering strength, and there's been an uptick in selling pressure (-DI). Relative strength (RSI) is weak and money flow (CMF) is well on the negative side. Average daily volumes have been falling steadily. Sounds like CTRX ought to be a real loser.

But wouldn't you know — in the last hour and a half of trading, CTRX bounced back up for the close. True, there was a failure to collapse, but there was also a failure to rally. Hmmmm—

Buy to cover

3-May-05. CoTherix started to show signs of a possible change in direction last Friday with a very indecisive day. Yesterday it rose with decent volume. This morning I watched it closely after the open and saw that the bulls were winning the battle so I covered for a nice profit.

I think the downtrend is still actually intact (see sidebar) and this is just a minor peak. If I'm right, I can short CTRX again after the peak and collect some more profits from others' misfortune — again, if I can do it right.