Friday, August 12, 2016

Popular torpedo stocks;

According to BNN the shares of Concordia International tumbled six per cent on Friday after the company replaced its chief financial officer and slashed its outlook

Most technical analysts I know were not surprised – visit comments on 2015-05-22             COMMENT - Bill Carrigan re Concordia Healthcare Stock Symbol: CXR-T ($83.70) “Chart shows a long run up with a sort of spiked top. Thinks these types of companies are overcrowded trades. They are driven by promises with great stories. He would just avoid it unless you are a trader.” 2016-03-24             DON'T BUY - Bill Carrigan re Valeant Pharmaceuticals Stock Symbol: VRX-T ($41.20) “There is a technical rule on spikes. There is a head and shoulders pattern suggesting downside is on the way.  Usually it takes 2 or 3 years to correct the damage.  Does the price lead the fundamentals? He can show you that they were in trouble before the last torpedo. The technicians knew the 50% sell off was coming.  In many cases you cannot avoid them. This was a case where you could avoid it.”

The technical rule on torpedoes is that in many cases you can’t predict them (Potash) but some are preceded by warnings – such as an over-loved story that has broken down below the important 40-wk moving average – the other rule is to never invest following the torpedo – it takes up to three years to repair the story

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