Diary of a Financier

Acorda Short Setup

In Capital Markets on Wed 8 Dec 2010 at 15:04
  •  Preparing to short ACOR on technical & fundamental reasoning.
  • Target: $25.

According to technicals, the weekly chart indicates that Acorda Therapeutics (ACOR) has established a trend that’s safe to short.  Therefore, I’m looking for the best entry point for a short position.

ACOR Weekly Chart

For this entry point, I’m following the shorter term daily chart, which also nominates this as a safe zone for short-positions.

ACOR Daily Chart

Once the SStoch & MACD cross their signals, I’ll enter my position to capture this bearish trend with a $25 price target.  Note that the MACD has failed to cross into positive territory in addition.  A look at the extended daily chart shows the price action’s violation of  support around $28.50, which puts us at today’s range, with new first support at $25.

ACOR Daily extended

As my silver lining, the fundamental case is stack against ACOR too. Take a gander at the earnings, both trailing-12 months & forward-12 months.

Upper: Price & PE; Lower: Trailing EPS & Forward EPS

Trailing EPS are climbing out of deep losses, currently at -$1.02 EPS (TTM), which makes the forward expectation of $1.41 FY2011 appear quite desperate.  The balance sheet is tidy by all measures, but Price/Book clocks in at a rich 7.20, and insiders are selling quite furiously.

By week end, I expect to have the confirmation I need to enter my short position in ACOR.


  1. I’ll have to revisit this one. The MACD cross never ocurred and the stock broke out. We’ll see how momentum picks up, because this could be a tradeable reversal.


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