Patheon Inc. pulling back

Oct 30th, 2013 – Comment

The six-month chart provides a close-up of the lower highs and lower lows that have dominated the chart over the last month as the stock has given up over 7% since September 23.


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PTI LOGO

I have been holding PTI for a while and my average cost is $4.60.  Is it time to take profit or let it ride?

Tony

 

Hey Tony,

Thanks for the assignment. Patheon Inc. (PTI TSX) is a service provider to the global pharmaceutical, biotechnology, and specialty pharmaceutical industries. The company employs 6,000 people at 13 contract manufacturing plants and 8 development centres. You are currently in the money on your investment which is always a good time to review your position. The market capitalization for PTI  is $824.4 million which makes it a mid-cap providing a lower risk profile compared to a small-cap.

Volume has thinned out since the company reported its Q3 results on September 05, 2013. The average daily volume for the stock over the last three months is 34,156. Volume has only been above average in five of the last 30 days and one out of the last ten days. What we know about volume is that we need sustained better than average volume to move a stock higher.

An investigation of the charts will provide further and better particulars to assist you in making a sell or hold decision.

 

PTI

The three-year chart depicts the profitable advance that began in December of 2011 where the stock caught a bounce off the rock bottom at $1.12. What is observable on this chart is that the uptrend has been broken and support along the 50-day moving average has been breached. You should also take notice of the sell signals generated by the MACD and the RSI as we came into late September.

 

 

 

 

 

PTI2

The six-month chart provides a close-up of the lower highs and lower lows that have dominated the chart over the last month as the stock has given up over 7% since September 23. The next level of support comes in at $5.80 then $5.60 below that. If $5.60 fails to hold you could see a retest of support along the 200-day moving average at $5.11.

You are currently sitting on a better than 27% gain on your investment which I think you need to protect. The fact that you are asking if you should sell tells me you want to sell. Selling today doesn’t mean you can’t get back in when the stock begins a new uptrend but right now your judgement is clouded by the fear of loss. Throw to cash and take the emotion off the table.

Make it a profitable day and happy capitalism!

Categories: Pharmaceuticals
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