Salix Pharmaceuticals (SLXP)

Company

"Salix Pharmaceuticals, Ltd., headquartered in Raleigh, North Carolina, develops and markets prescription pharmaceutical products for the treatment of gastrointestinal diseases. Salix's strategy is to in-license late-stage or marketed proprietary therapeutic drugs, complete any required development and regulatory submission of these products, and market them through the Company's gastroenterology specialty sales and marketing team. Salix also markets XIFAXAN®, VISICOL®, OSMOPREP™, AZASAN®, ANUSOL-HC® and PROCTOCORT®. In August 2006, the FDA approved MOVIPREP® for bowel cleansing prior to colonoscopy, and we intend to launch sales of the product in mid-fourth quarter 2006. Balsalazide tablets, Granulated Mesalamine and SANVAR® (600 ug vials vapreotide acetate powder) are under development." (company website)

Buy

27-Oct-06.

• Price momentum (PPO) — slowed during pullback toward 50-day moving average
• Trend (ADX) — still above threshhold (20), but buying pressure (+DI) weakened during pullback and is now below selling pressure (-DI)
• Money flow (CMF) — neutral
• Relative strength (RSI) — slipped back to neutral, but ticking up(?)
• Volume — a little worrisome, since average volume continues to fall slightly

After I got stopped out this morning, I decided to jump back in again, and until the market turned sour late in the session, it looked like I had done a good thing. However, SLXP closed below my buy, so I am already in the hole on the first day of the new position.

Sell

9-Nov-06. Took a thumpin' on this one. When I saw four up-days with increasing volume I was willing to believe that SLXP would recover, but when it broke decisively below the 200-day moving average for the second time in two weeks, I could see the handwriting on the wall and bailed. Didn't even bother for my stop-loss to kick in.

Maybe the uptrend hasn't been broken, there's just a bit more retrenchment to do. On the other hand, maybe it has been broken. I'm not going to stick around to find out which.