Acadia Pharmaceuticals (ACAD)


"ACADIA Pharmaceuticals is a biopharmaceutical company utilizing innovative technology to fuel drug discovery and clinical development of novel treatments for central nervous system disorders. We currently have five programs in clinical development as well as a portfolio of preclinical and discovery assets directed at large unmet medical needs and major commercial markets. Our four Phase II-stage clinical programs, for which we have retained worldwide commercialization rights, are ACP-103 for treatment-induced dysfunctions in Parkinson's disease, ACP-103 as an adjunctive therapy for schizophrenia, ACP-103 for treatment of sleep maintenance insomnia, and ACP-104 for treatment of schizophrenia. We also have a neuropathic pain program in Phase II clinical trials in collaboration with Allergan. All of the drug candidates in our product pipeline emanate from discoveries made using our proprietary drug discovery platform. We have assembled a strong team of industry-experienced executives and world-class scientific and clinical advisors to direct the development and commercialization of our product pipeline, and we plan to continue to selectively establish strategic collaborations to advance and maximize our commercial opportunities." (company website)

ACAD 3-month stock chart

Sell short

Acadia is in a long downtrend (see sidebar) and is poised to fall more after failing a test of the one-month moving average.

  • Price momentum (PPO) — improved slightly, but still very negative
  • Trend (ADX) — very strong, with selling pressure (-DI) above buying pressure (+DI)
  • Money flow (CMF) — improved, but still on the outflow side of neutral
  • Relative strength (RSI) — gradual decline over the past three months and weakening
  • Volume — average is falling

Based on technical analysis, MarketEdge calls ACAD a "short candidate" in a "strong downward trend."

Buy to cover

gain Bottom line

I decided to cover Acadia today even though it has fallen steadily since I sold short. First, there are signs of mild improvement in the chart, even though MarketEdge still calls ACAD a short candidate: momentum (PPO) is picking up as is relative strength (RSI). Second, earnings should be coming out sometime soon (no announcement yet), and the company is presenting at an industry conference — a fine opportunity to make market-moving news. Third, ACAD is getting close to the low set in January. I'll pull back to the sidelines to await further developments.