Raptor Pharmaceuticals at 1/3 Off Looking Like a Deal

Remember when everyone wanted to buy Raptor Pharmaceuticals, $RPTP, on a break over $15. well now with it at $10 just 2 months later you can get 50% more for the same money. Good deal right? I suppose you all want to tell me something about the fundamentals kicking in on the earnings report, justifying the move lower. Did you hear that? That was me putting my fingers in my ears and saying lalalalalala so I can;t hear you. Its not that I don’t believe that fundamentals have a place, just not in day-to-day valuation of a company’s stock price. Earning can certainly be a catalyst as was the case in this stock. But now that we have put that aside, there may be a compelling real reasons (technical of course) to buy the stock near $10. 5 of them in fact:

  1. There is previous support at this level from July and August 2013
  2. The Relative Strength Index (RSI) has flatlined in the low 20’s, oversold, with very little downside room
  3. The MACD is about to cross up (see histogram) and not falling any more
  4. Price is very extended from all of the Simple Moving Averages (SMA) above
  5. The falling pennant on falling volume over the last 2 weeks

rptp

All of these are potential reversal signals. Now here where technical analysis gets tricky.  You need to wait for them to reverse higher and show support and a bounce before you act.  We technicians don’t just blindly buy stock because they are cheaper you know.

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