Bulkowski's Abgenix 2 Trading Quiz

Here's my notebook entry for the trade.

"4/23/04 I believe price will rise to 16 to 17, and, if lucky, push through to make new highs. Earnings are due a month from today, so that gives us room. Downside is 12.94, stop, for a loss of 12%.

Filled at: 14.66 to 14.67. Buy/sell reason: Head-and-shoulders bottom upward breakout. Mood: buoyant but rushed. Wanted to get this in before the close and it may be a hip shot. I'm depending on [the] head-and-shoulders to perform. S&P direction over pattern lifetime: Downward. Future market direction (guess): Hard to tell. I expect market to rise for a few days until tagging earlier ascending triangle then declining, forming a large double top. Confidence, will trade work? Yes. Confidence is high. Stop: 12.94, or 12%. Upside target: 16-17.

The next trading day, price shot up as the above chart shows. It blew through my 16-17 target and topped out at 19.50, but closed much lower, at 17.70.

Here's what the Wall Street Journal had to say about the move the next day: "Small companies that are developing cancer treatments saw their shares soar after large-caps Genentech and OSI Pharmaceuticals reported positive data from a late-stage trial of Tarceva, a lung-cancer treatment."

Question: Do you hold onto the stock for additional gains, sell, or buy more?

Here's my notebook.

As you can see, I sold a day after the stock peaked and made 25%. Not bad for a 3 days of work.