Cerus (CERS)

Company

"Cerus Corporation is a biopharmaceutical company that develops and commercializes novel, proprietary products in the fields of blood safety and immunotherapy to provide safer, more effective medical options to patients in areas of substantial unmet medical needs." (company website)

Buy

6-Dec-06. This is the day of living dangerously. I made a nice profit on an earlier lot of CERS, and, at the time I got stopped out, the chart looked strong and promising for another buy after a pullback. The price hung around $7.50 for several days, and I began to think the pullback was over. Today, however, CERS got slammed on news that the company would offer nearly 4 million shares at $6.68 to institutional investors, driving the price way below the 50-day moving average. I watched for a while and when it seemed that CERS was going to recover at least part of the loss, I decided to jump in, even though I would have waited a while, everything else being equal. A bargain is a bargain, after all.

• Price momentum (PPO) — slowed sharply in last two weeks
• Trend (ADX) — weakened sharply in last two weeks, but with buying pressure (+DI) and selling pressure (-DI) fairly stable
• Money flow (CMF) — slight outflow
• Relative strength (RSI) — weakening in last two weeks
• Volume — average volume had been creeping upward, with 4-times normal volume so far today on the slam

Sell

11-Dec-06. The bounce simply did not materialize. Although there were signs this morning of strength, CERS fizzled out, and with only 3 updays in the last 14, the odds don't look good. Bye-bye!