10% trailing stop loss order was executed @ $5.3901 at 3:13:49 PM EST today. Realized a 13.36% loss (commission and fees included). Closing price: 5.54. Day's range: 5.26 - 6.05. Volume (665k) was slightly above average (650k).
If the law of averages holds, BDSI should close the up-gap occurred ten days ago before it can advance past 8.26, that day's high and all-time high. The stock hit the roof because the company had announced that one of its primary drug candidates was found to be significantly effective during a phase III clinical trial. But in order for the company to capitalize on this, it would have to get FDA approval, mass-produce the drug and market it to cancer patients. It would take a while before the company sees a revenue stream coming from this drug.
My mistake this time was because I had placed too much emphasis on herd mentality and not enough emphasis on the fundamentals. I had also bought on news and before I had a chance to look closely at the company's financial statements. This company is no cash cow.
If tomorrow BDSI gaps up again, or rallies a few percentage points from today's close, it would be because crowd mentality is at work again, or new sources of financing are showing up, or something positive I cannot foresee today materializes. When that happens, I will be weeping on the sideline because luck isn't on my side. However, if it closes down or sideways, then I will consider my prediction a true vision.
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