RE:RE:I love Valeant :)Daytraders are getting sucked into this by thinking there's an imminent rebound back to $60 or higher. That will not happen at least until they get audited statements. Obviously they are at odds with their auditors and the auditors have huge exposure here, so they are digging in their heals. I would bet in the past that VRX was able to sway the auditors into accepting some very aggressive accounting, but this time there is so much more potential litigation that the auditors will not bend. So the market is worried (and rightfully so) that the recently released unaudited numbers will worsen. In the meantime there may be a few decent pops of 5-10%, but they will fizzle because there are so many recent buyers that will look to exit on any strength. So right now this is a casino stock and you might get lucky with your timing because there will be a few $5 pops - the question is will it occur at $35, $30, $25? But there is now so much short term money in this stock, a sustained rally will require some very positive fundamental news.
On the other hand I think anyone shorting this stock is equally crazy - there is always a chance that the audit gets resolved without any further adverse effects and we get a more significant rebound. Really anything could happen
For disclosure, I have no position in VRX however I was buying CXR and NHC this past week, hence my interest in the sector.