ArQule (ARQL)

Company

"Our mission as a biotechnology company is to research, develop and commercialize a next-generation of small molecule cancer therapeutics. We are combining innovative, proprietary anti-cancer technology with world-class chemistry capabilities to generate drug candidates with an optimal balance of drug-like qualities. Our lead products are in clinical development, and our research pipeline targets multiple molecules with established roles and therapeutic potential in cancer." (company website)

arql(3-1)
ARQL 4-month chart
armh(3-1)_1yr
ARQL 1-year chart

Buy

July 30, 2009. ArQule has had a nice runup since March, and is poised to pass the most recent high after a pull-back to the 50-day moving average. At the beginning of June, the P&F chart showed a triple-top breakout.

mammon_260x300 Worshop of Mammon
(Evelyn de Morgan, British, 1850-1919)
  • Percentage price oscillator (PPO) — crossing above the signal line
  • Volume — a bit weak, probably caution before next week's earnings report

Based on technical analysis, MarketEdge calls ARQL a "buy" in a "strong upward trend" but notes that it is "overbought."

Although technically overbought, I see sharply gathering momentum since mid-July approaching a resistance range ($6.18-$6.35). The up/down ratio is strong (2.1); money-flow slope is up; and both moving averages are trending up. Oh, Mammon, god of greed, I hope I'm right.

Sell

gain Bottom line
-10%

11 August 2009. The Street was unimpressed by ARQL's smaller-then-Expected loss, and the price has continued to fall. Although the gloominess of the market so far this week undoubtedly contributed, the PPO is diverging in the wrong direction. I'll take my loss and move on, especially in light of the handsome profit I made on CHNG.