Weekly thought on $DMRC, $ARTH, $IBIO, $BIOC, $RBY

Thanks goodness for Friday rally, the week was able to close with an up bar to confirm last week spectacular capitulation bar as a possible bottom-formation bar.

SPY_Weekly

See how the support at $181.92 successfully killed the bear momentum with the recent bounce being the 3rd time since October of 2014.  2014 & 2015 both kicked off the year negatively but recovered by February.  Look like 2016 is repeating the same pattern.

$DMRC corrected another week. DMRC_weekly

The downward momentum was weak and price was able to recover on Friday to form a longer-tail at at the bottom of the weekly bar.

DMRC_daily

On the other hand, on the daily chart, price is bouncing off the powerful support of the 79 & 89 MA support lines.

Fundamentally speaking, we are simply waiting for more announcement of adoption by retailers.  Each new adoption announcement will add more weight to the side of the balance scale that pointed to global adoption.  As the scale starts to shift in favor of global adoption, more investors will come on board to buy a “$1,000 zero-coupon bond” for $100.

What?

Let’s use the recent global conversion of analog TV to digital TV as an example.  Let’s also assume that there is only one company with patent of a technology that will allow Digital TV to work.  If you hear news about the potential future adoption of digital TV globally, wouldn’t you want to own a piece of this company even though you know digital TV won’t be fully adopted until a couple of years later?  As more news of adoption of digital TV signal by national broadcasters around the world are announced, don’t you think that more and more investors will want to own a piece of this company even though the revenues haven’t come in yet?  The fact that revenues is virtually guaranteed to come later when TV manufacturers start to pay the licensing fee to use the IP to build their digital TVs is the rationale for my statement of buying a $1,000 zero-coupon bond for $100.

Now, replace the digital TV from the above example with Digimarc’s Digital Watermark (DW). It so happen that Digimarc owns the IPs for the digital watermark that allows retailers to put the invisible UPC barcode all over the packaging to facilitate faster and efficient checkout as well as providing relevant information to customers who pointed the phone to the product packages.  With faster checkout speed due to the use of DW, retailers are going to save billions in cost annually.  With the ability to give customers instant information on the product while shopping allows retailers to keep the purchase at the store instead of  losing out to online competitors.

So, as more news is announced on the adoption of DW to enhance the UPC barcode reading, don’t you want to own a piece of $DMRC even though the big revenues stream won’t start coming until years later?  Like a snowball, this revenues stream can grow by leaps and bounds when it becomes certain that the DW will be used globally.

This is why I must exercise great discipline to not “trade” this position for short-term gain ’cause any day is a potential day for announcement of more adoption by other retailers.  The recent 2016 NRF Big Retail Show convinced me that there are a lot of supports in pushing for DW adoption.  And any adoption news will propel this stock to new level.  The shorts who failed to see the potential guaranteed revenues stream when major retailers kick off the trend in adoption is going to regret not covering sooner.  Right now, they are still thinking of the past financial revenues stream as their justification for shorting and do not believe that DW will take off.  Using the parallel example, it is as if the shorts are betting that digital TV would never take off.

Of course, my bet is that DW is going to take off and become a global standard of presenting the UPC barcode in all packaging.

$ARTH gained in inch for the week despite the meltdown of the biotech sector as a whole for the week.  I consider this a big vote of confidence so far while waiting for the human trial to begin and complete in the 1st half of the year and that is only five months away.

ARTH_weekly

From the weekly chart above, look like price is basing at this level and is about to bounce soon.

$IBIO did even better than $ARTH by having a higher percentage gain for the week despite the biotech meltdown.

IBIO_weekly

Kenneth Dart’s Eastern Capital Ltd acquired 3,500,000 shares of stock per recent filing.  This is akin to seeing a major insider buying 3.5 million shares of stock.  Thanks to the news, $IBIO was able to bounce back despite biotech meltdown.

$BIOC also did not suffered from the biotech meltdown as well but instead gained a small percentage for the week.

BIOC_weekly

This is a matter of waiting for the liquid biopsy to gain traction in the medical fields.  Once the technology gains widespread use, Biocept will shine brilliantly.

$RBY What more can I say?  This is a small position being sacrificed for the others to receive blessing is one way to look at it.  However, I’m not writing this one off just yet…

Still holding long and strong on my current “buy and hold” positions.

My 2 cents.

From my camera (click on photo to see image at 100%)

purple-firework-3

 



Categories: Daily trading Journal, trading journal

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