CollaGenex Pharmaceuticals (CGPI)

Company

"CollaGenex Pharmaceuticals, Inc., is a specialty pharmaceutical company focused on providing innovative medical therapies for targeted disease classes in high potential markets. CollaGenex currently serves the dental and dermatology markets." (company website)

Buy

5-Aug-05. CollaGenex reversed a long downtrend in May, and has been climbing sharply ever since (see sidebar). On 2-Aug, CGPI reported a loss for the quarter, compared to a profit in the year-ago period. Nevertheless, the stock price has risen—go figure! I think it must be due to very positive news about drugs in their pipeline. At any rate, the price has jumped up after a consolidation period ending with earnings report.

• Price momentum (PPO) — was falling until the earnings report, but sharply up since then
• Trend (ADX) — very strong, and buying pressure (+DI) is much higher than selling pressure (-DI)
• Money flow (CMF) — strongly positive
• Relative strength (RSI) — very strong, although stochastic RSI (StochRSI) suggests it may be overbought
• Volume — much higher than normal volume on post-earnings jump after consolidation period

Sell

29-Sep-05. CGPI hit another 52-week high this week, trod water the next day, and started to fall today. I bailed out when it looked like a sell-off was underway. (The price has since recovered quite a bit, but is still down 4% on the day, with an hour left to trade.)

CGPI has more than doubled since the low in May (see sidebar), and I believe that it is just going to correct back to the 50-day moving average before advancing some more. The uptrend is still clearly in place. Unless something changes, I intend to buy back in when the correction is over.