Weekly thought on $ARTH, $AMRN, $IBIO, $MTCH

The market has an indecisive week.

SP-500_weekly

Although it is a down week, it closed with a spinning top candlestick bar.

So?

Well, that mean the bull was able to fight back enough to create a “tail” below the candlestick body. Since this is not a solid red bar, there is a better than 50/50 chance that the bull can bounce back higher next week due to the fact that price is still trading at bull territory.  Yeap, the bear is fighting the bull in vast bullish territory.

Take a look at the monthly SP500 chart below, I think it is safe to say we are still in the bullish territory, don’t you think so?

SP-500_weekly

$ARTH closed the weekly slightly higher.

ARTH_weekly

Notice that the chart is now reflecting a “double-bowl & handle” formation.  Basically, this is a rare variation of a cup & handle pattern.  Remember, the pattern by itself means nothing, it is the “breakout” of the handle to the upside that is what we are all looking for.

As far as I’m concerned, it’s all good.  At this point, those who swing-traded this stock are missing the point.  The long-term investors are simply making an ultimate bet with the idea that this is a high probability winning trade that not too many people are aware of.

My 2 cents, after all my years of school of hard knocks, is that there are two major ingredients for any investor to make a hugely successful trade that comes with huge pay-off.

  1. Being AWARE of the stock with the POTENTIAL to grow big in the future.
  2. Being INVESTED All The Way once you are aware of such stock.

The first one is a a tough one because it is like finding a gemstone from the haystack.  How do we know which one is the right one?  I’m sure many of us have gone thru the moment of “Darn! I should’ve, could’ve…” when one of the stock symbols we passed over turned out to be a huge winner.

So, how do we minimize the occurrences of “should’ve, could’ve”?  

By doing your own due diligence once you find the “science” of the stock you are interested in caught your fancy.  It is my experience that unless you do your own due diligence, you will not have the conviction and endurance to take on step 2.

You need to have a strong conviction to stay invested in a volatile stock.  By design, ALL stocks that have the technology to change the future is extremely volatile and risky.  They are the reason the phrase “high beta” is being used to label them.  In my book, high beta is synonym to “high risk/high return”.

Without doing your own due diligence, it is extremely difficult to stay invested due to the fear that the stock you picked “may” be a dud.

Having said all the above, just because you read-up on the technology is not enough.  You need to analyze all available data to decide on the odd of success.  As Warren Buffett famously stated:

“With a wonderful business, you can figure out what will happen; you can’t figure out when it will happen. You don’t want to focus on when, you want to focus on what. If you’re right about what, you don’t have to worry about when

The key phrase in Warren Buffett’s wisdom is “IF You’re Right About What“.

After my own due diligence and personal analysis, it is my 2 cents that I’ve a very good chance of being “right” about Arch Therapeutic’s AC5 being a disruptive technology to change the way surgeons and doctors perform their duties.  Thus, I’m thankful for being “aware” of this stock and have resolved to “stay invested” to see through the AC5 venture.

Btw, just because I believe in the technology of AC5 doesn’t mean it is guaranteed to be successful; however, it is the necessity of having a conviction about AC5 in order to stay true to Warren’s key point of “IF You’re Right About What“.  In a nutshell, “IF You’re Right About What” is the cornerstone of any long-term investment.

$AMRN did not have a good week.  In fact, it gave back gains of the last five weeks in just one week.

AMRN_weekly

Although I bought back my position after I sold it all on previous Tuesday, I got cold feet again and sold it all again on May 3rd.  Then I decided to buy back 50% of my position on the 4th. After reporting earning and revenues misses in the early morning before market open on the 5th, I decided to cut losses at the open which was a good decision since price had dropped further the rest of the day and Friday.  I did buy back about 10% of my position on the 5th below $1.70 during the day. In summary, I was able to keep some gain from entry of five weeks ago instead of giving it all back if I had hold.

Nevertheless, I still believe Amarin’s Vascepa will be a success in the Reduce-it trial and will look for opportunity to add more shares from here to build back my position on $AMRN.

$IBIO ended the week with a weekly doji bar.

IBIO_weekly

While price closed slightly down from last week, I believe this is a “pausing” doji and price will continue higher from here. As far as my interpretation from the weekly chart above, the breakout is still intact and price is merely taking a break.

Fundamentally speaking, I believe iBIO is working tirelessly to kick off their fibrosis treatment trials.  It is a matter of time before any news is provided regarding their status.  Here is an excerpt from the April’s shareholder meeting update:

iBio, Inc. Holds Annual Meeting in College Station, Texas

April 07, 2016
NEW YORK, NY — (Marketwired) — 04/07/16 — iBio, Inc. (NYSE MKT: IBIO) – Speaking to shareholders at the iBio, Inc. (NYSE MKT: IBIO) Annual Meeting today, Chairman and Chief Executive Officer Robert B. Kay highlighted the Company’s most important achievements since its last Annual Meeting — first, the creation of a new subsidiary for product development and large-scale manufacturing using the Company’s proprietary plant-based technologies, and second, significantly advancing the Company’s own product candidates against fibrotic diseases toward human clinical trials targeted to commence in 2016.

Source: http://ir.ibioinc.com/press-releases/detail/66/ibio-inc-holds-annual-meeting-in-college-station-texas

Note: Underlined is my own emphasis

Management listed their key achievements in the first paragraph of their shareholder update.  Notice that in their 2nd achievement, iBIO has significantly advanced the company’s own product candidates against fibrotic diseases toward human clinical trials targeted to commence in 2016.

Basically, investors should hear news one day regarding the commencement of the human clinical trials against fibrosis diseases.  When is the announcement of this news will be anyone guess but I certainly want to “stay invested” while waiting.

This week I got into a new stock to swing for the fence.  It is $MTCH.

MTCH_weekly

Match Group Inc. is a company that dominates the global online dating market. Besides its flagship Match.com which I’m sure everyone has heard of simply because of the online advertising that proliferates on the world wide web, it also owns (mostly from acquisitions) 40+ other major online dating services.  I believe that one of Match.com online services, Tinder, has the potential to grow by leaps and bounds.  It is gaining popularity and per Tuesday earning update, has one million paying subscribers.

I bought a starter position on Monday betting on good earnings to be announced on Tuesday after market close.  After confirmation of positive earning grow and the popularity of Tinder, I immediately increased the size of my position at the open on Wednesday morning.  From there, I continued to add to my position until I’ve enough for a swing-for-the-fence play.

In a world of minimal human-contact online interaction, Match.com and its sister online services are providing a tool to bridge the gap b/w online interaction and real-life human interaction.  I’m seeing a future where Match Group will provide more than an online dating services, it is a place to “initiate” all kind of human interaction that span from “fun” to “educational” with “dating” in the middle.   Thus, I believe by dominating the online dating services worldwide now, Match Group is holding the key to expand their services to encourage human interaction of all kind from a variety of population.  In a way, as in Amazon.com being more than a bookseller, my bet is that Match Group is going to be more than just an online dating services in the years beyond.

Perhaps, just perhaps, $MTCH will make up for the $FB, $AMZN, etc. that I’ve missed.

During the week, I also bought in $CARA but sold later for small losses.

Due to the volatility of $AMRN,  my port gave back 1% for the week.

Current holdings:

Main port (no margin) : MTCH, IBIO, AMRN and 33% cash (up 20% YTD).

Trading port (with margin): ARTH (up 51%)

From my camera:

Purple babies

 

 



Categories: Daily trading Journal, trading journal

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