QLT Inc (QLTI)

Company

"QLT Inc. is a global biopharmaceutical company specializing in developing treatments for eye diseases as well as dermatological and urological conditions. Together with our subsidiaries, we have combined our expertise in the discovery, development and commercialization of innovative drug therapies with our two unique technology platforms, photodynamic therapy and Atrigel®, to create products such as Visudyne® and Eligard®." (company website)

QLTI 1-year chart
QLTI 1-year view

Buy

QLTI 2-month chart QLTI 2-month view

QLT has been trading in an upward channel for several months now. Yesterday, QLT reported quarterly and annual earnings results yesterday before the bell: a much narrower loss compared to a year ago and lower revenues and sales. However, they attributed the loss to a litigation settlement and lowered revenues to lingering costs. Although they beat expectations, I anticipated that the stock might be punished in an over-reaction by The Market to lower revenue. The price I was able to buy at is roughly in the center of the channel.

  • Price momentum (PPO) — rising sharply in last two months
  • Trend (ADX) — strong
  • Money flow (CMF) — brisk inflow of money
  • Relative strength (RSI) — above neutral
  • Volume — a bit lower now but up during last three months of 2006

Based on technical analysis, MarketEdge calls QLTI a "strong buy" in a "weak upward trend."

Sell

loss Bottom line
-14%

The market freefalls at the end of February and beginning of March took a great toll on QLTI, transforming it from a very promising buy to a short candidate. I stuck with it for three weeks because there seemed to be rather firm support just around $8.20. After three days of further declines, however, the breakdown in clear, even to me. I decided it was time to take my loss and lick my wounds.