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

The SP500, although down for the week, was able to bounce back up after testing the support at $181.92.

SPY_Weekly

This is the 2nd time the weekly bar bounced off the support for the year (5th time if you counted the bounces in 2015).  So you can say this support is very powerful indeed.

$DMRC took another tumble which is not surprising ’cause it is really not that hard to walk the stock down giving the wide bid-ask spread, low float, and lack of liquidity.  On the other hand, it doesn’t take much to make this stock run like a jack-rabbit to upside when there is a sudden demand for the stock such as short-squeezed or buyers deciding not to wait for the earnings update.

The short-sellers are banking on the repeat of the meltdown after last quarter earning update to generate fear for the upcoming quarterly earning on Feb. 24th.  But I’m not worried of the possibility especially after show of unprecedented supports from GS1  as well as other industry giants such as Microsoft & HP among others.  If the shorts are banking on covering on their “expected” meltdown, they may find it hard to do so ’cause investors may be competing with them for the low price (if any) created from the walk-down.

Recently, I came upon an old article titled, “3 Stocks I’d Never Short” and one of the stock is Amazon.com.  Below is an excerpt:

The primary danger of shorting a stock is that while you can make 100% if the company you short goes bankrupt, your downside risk is theoretically unlimited. Therefore, one type of stock I would never short is what I call an open-ended growth story. E-commerce titan Amazon.com is the epitome of the type of staggering and unending growth I’m referring to.

To attempt to short such a stock can be analogous to stepping in front of a bus… followed by a steamroller… followed by a tank. Many short-sellers have been absolutely crushed by Amazon’s incredible ascent — and unfortunately for them — many more likely will be in the years ahead.

That’s because while it’s true that Amazon’s stock price has pulled back sharply from the all-time highs it reached in January 2014, I believe the downturn will be short-lived. Incredibly, even after the stock has risen more than 100 times in value from its 1997 IPO, the potential still exists for more multi-bagger returns from this point forward. Amazon is tremendously well-positioned to benefit from the booming growth of Internet-based commerce, which still accounts for less than 10% of total retail sales. Yet that figure is growing rapidly, and it’s a fast-rising tide that’s propelling Amazon’s sales along with it.

Bears will point out that even with Amazon’s impressive revenue generation, it’s failed to produce much in what they’ll argue is far more important: profits. This too is true, although a look at cash flow generation will paint a far brighter picture.

But what short-sellers should be most concerned about is that, in many ways, shorting Amazon is a bet against the growth of the Internet. It’s also a bet against convenience and innovation. And it’s a bet against tried and true principles of economics such as the benefits of economies of scale and the power of a wide, competitive moat that grows stronger by the day.

The underlined and bold face in the last paragraph is my own emphasis.  I found the last paragraph also very applicable to the current Digimarc revolution.  To paraphrase,

“Shorting Digimarc is a bet against the growth of the mobile smart phone.  It’s also a bet against convenience and innovation.  And it’s a bet against tried and true principles of economics such as the benefits of faster checkout and power of instant product information being available while shopping at the brick & mortar stores that help keep the customers’ purchases at the store.”

Come to think of it, it is the rising power of Amazon.com that the brick & mortar retailers have no choice but to adapt by adopting the latest technologies to compete.

$ARTH dropped slightly for the week but the waiting is still on regarding the human trials.  There is not much to do but wait, wait, and wait.

$BIOC gave back last week gain but the coming earning update will be revealing.  This is also a waiting game for the eventual adoption of liquid biopsy to replace the more expensive tissue biopsy.

$IBIO also gave back gains from the last three weeks while waiting for development of the fibrosis treatment.

$RBYCF, while giving back some gain from last week, is still above the low from two weeks ago.

My 2 cents.

From my camera:

014

 



Categories: Daily trading Journal, trading journal

Tags: , , , , ,

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: