This week the market threw a boomerang at us. It kicked off the week with some decent up moves that I concluded by Tuesday the previous week doji bar must be a “pausing” doji before continuing. Thus, I went back to buy equities and everything was looking good until the boomerang came back almost hitting me on the head on Friday!
From the daily chart above, Monday to Wednesday looked strong with a resting pause on Thursday. Then Friday, price took back all gains for the week plus some like a boomerang coming back to fly over your head. Whoosh!
Good news is that there is support at the 15 MA line. Thus as of now, Friday down move can be considered a normal correction after three weeks of up moves. It is far too early to say that the bear has gotten back control.
Although I got back to buying stocks after going into 80% cash last week when there were no crash per my expectation, it wasn’t free. I had to pay a premium to buy back the stocks I got out. In other words, the safety in cash wasn’t free.
AMRN finally corrected after four weeks of up move.
I bought back Amarin on Tuesday thinking that the upward momentum could continue unabated. Not only had I paid a premium to buy back above my selling price last week, I bought right at the top before price started to correct on Wednesday. So much for my “timing”.
After witnessing draw-down of three days in a row from Wednesday to Friday, I decided to throw in the towel and liquidated my position for losses. Basically, I gave back some gain I made from three to four weeks ago. I sold ’cause I need to raise some cash and Amarin was the weakest of the other two heavy hitters I’ve- $MTCH and $CERS.
CERS was looking like it was breaking out of the daily 79 & 89 MA resistance on Tuesday and I decided to go back in. I’d been watching $CERS on and off but on Monday night when I saw price rallied hard to hit the 79 & 89 resistances, I sensed a break out happening. So when price opened a bit higher on Tuesday, I started buying.
As you can see on the daily chart above, I did well on Tuesday ’cause I was immediately in the black and had a nice profit cushion to weather any day-to-day volatility. Thursday correction was not an issue but Friday morning drop was a bit touchy ’cause I was back at breakeven just like that. Thus, to avoid a profitable trade turning into a deep red position, I immediately reduced my position size by half to allow myself some breathing room.
Right after I relieved myself half of the position, price rallied back upside and stayed positive for the rest of the day. Yeap, it really wasn’t my day. But not to let this setback discouraged me, I saw this bounce as a testament of a strong demand for the stock. Thus, by the end of the day on Friday, I paid the premium, once again, to buy back shares I sold in the morning plus some. You should know by now that for a strong stock, any “safety” play is going to cost me extra (aka premium) to buy back in. Like they say, “there ain’t no free lunch”.
Fundamentally speaking, Cerus has come a long way getting their blood cleaning system approved in Europe, U.S., and Canada. To avoid duplicating effort already done by someone at the Yahoo message board, I’m going to copy this guy effort and paste it here for all to pontificate.
Below is a post made by greatdayisback2013 from the Yahoo message board:
greatdayisback2013 • Jun 8, 2016 2:36 PM Flag
Eventually CERS will rally:
Health Canada Approves INTERCEPT Blood System for Plasma (May 23)
Cerus Announces that the Walter Reed National Military Medical Center Has Entered Into Routine Use of the INTERCEPT Blood System (May3)
Cerus Receives FDA Approval for Use of the INTERCEPT Blood System for Platelets Suspended in 100% Plasma (Mar 16)
Cerus Announces the Inclusion of Pathogen Reduction Technology in FDA’s Revised Guidance Document on Bacterial Safety Standards for Platelets (Mar 15)
Blood Centers of America Selects Cerus as its Supply Partner for Pathogen Reduction Technology (Mar 9)
Cerus Enters Multi-Year Agreement with the American Red Cross for the Use of INTERCEPT Platelets and Plasma (Feb 9)
AABB Authorizes Use of the INTERCEPT Blood System for Platelets to Reduce the Risk of Transfusion-Associated Graft Versus Host Disease (Jan 14)
Cerus and LifeShare Blood Centers Enter into Agreement for the Use of INTERCEPT Platelets and Plasma(Jan 7)
Cerus Announces Agreement with Blood Systems, Inc. for the Use of INTERCEPT Platelets and Plasma (Jan 5)
Cerus Announces Rhode Island Blood Center Enters into Agreement for the Use of INTERCEPT Platelets and Plasma (Dec 23)
Cerus Announces Agreement with the National Transfusiology Center of Mongolia for the Use of INTERCEPT Platelets and Plasma (Dec 10)
Cerus Announces Agência Nacional de Vigilância Sanitária Approval of the INTERCEPT Blood System for Platelets and Plasma in Brazil (Dec 9)
First Patient Enrolled in Cerus’ Phase IV PIPER Study (Dec 8)
Cerus and Shepeard Community Blood Center Enter into Agreement for the Use of INTERCEPT Platelets and Plasma (Dec 7)
Cerus Announces Mississippi Valley Regional Blood Center Enters Into Agreement for the Use of INTERCEPT Platelets and Plasma (Dec 4)
Cerus Announces Collaboration Agreement With Haemonetics for the Use of Acrodose Platelet Kits With the INTERCEPT Blood System for Platelets (Dec 2)
Cerus and The Community Blood Center Enter into Agreement fo Less
Sentiment: Strong Buy
Take a look at at the monthly chart below, there is this giant ascending triangle that took $CERS seven years to form. As they say, the longer it takes to build a breakout pattern, the stronger the breakout and lasting is the trend in the direction of the breakout.
Now, I need to remind myself not to be “too quick” to go to cash when the market sneeze…
The next heavy hitter I got back in on Tuesday is $MTCH.
The stock rallied hard on Monday but gave back most gain by closing day. Tuesday, the stock did not go down and with a positive broad market, I went ahead and started buying back shares I sold previous week. And yes, I paid a premium to get back in. In other words, I paid higher price than I sold for. That is ok since I’m trading for directional flow, not trying to pick bottom or lowest price. The purpose of buying because of the momentum flow is what allow me to go to safety and come back to the market even though I may end up paying more. What is the point of buying the lowest price, or the price I sold for, if there is no momentum after I bought. I know, I know… the momentum I’m going for is not guaranteed ($AMRN above is perfect example) but, statistically speaking, the odd of catching a run is always better if you buy a stock when you “sense” a momentum is happening.
Ok, wise guy, how do you “sense” a momentum is running?
Ahh… that is why I studied chart studiously, my friends.
In the $CERS example above, price was heading toward the major 79 & 89 resistances, and when during the next day when price did not fall back because of these resistances, I know the momentum was still strong from the previous direction. Remember, in any support and resistance observation, a failure of support and resistance to hold is also a “message” all by itself. Thus, when price was heading higher on Tuesday, I “sensed” a break out coming so I bought. These are plays you cannot hesitate. Once I “sensed” it, I’ve to act quickly with strong resolve; otherwise, you will end up missing it.
In order to be able to act quickly, you need preparation. The night before the market open, I already laid out a game plan:
- See if $CERS price falls back from resistance
- Preliminary review of the chart suggested the resistance would not hold.
- If not, be prepared to jump in.
- Decide how big this play is going to be and buy accordingly
- IF price falls the next day, then do nothing and watch.
Basically, the commander-in-chief inside me issued an order the night before as follow:
“Zen, tomorrow I want you to watch the opening. If price goes higher and move above the 79 & 89 MA resistance, I want you to buy at market to build up a position. And that is an order!”
You see, as a soldier, you don’t question the order, you just do it. Thus, when price opened higher, I started buying $CERS without any hesitation caused by internal debate as to whether it was a good idea to buy or not.
So it all comes down to preparation and planning. Spur of the moment plays usually got me into trouble ’cause I didn’t have a plan to monitor the exit opportunities. However, if I slowed down the spur of the moment to come up with a quick plan, then I would be fine most of the times.
Back to $MTCH. When Friday hit, somehow I found the “cool” to not push the panic button to reduce position size. Instead I watched the correction and decided to add more when price started to firm up on the rebound going into the close. I guess I “sensed” a huge rally coming? Well, how can you not when you look at the weekly chart above?
$IBIO took another hit when boring investors exited their position.
Can you blame them? Well, that depend on your purpose of going into the trade. If you are going in for a quick swing play, you come to the wrong door. If you come in with an expectation that a trade will happen in a designated time frame, then you come to wrong door again. However, if you come in to speculate on the “event” or “milestone” play, then you are at home here. These events are unknown but you know they are coming. You just don’t know when. And if you’re correct in the type of events and the magnitude of the move, then it doesn’t matter how long I’ve to wait ’cause once the price movement is made, the returns will blow away all those gains I’ve made from “active trading” of other stocks.
Thus $IBIO is not considered to be a “regular” trading position. It is what I called the “incubation” play. You either hatched a golden chicken out of the egg or you ended up with a smelly rotten egg. Of course, I believe IBIO is a golden chicken waiting to get out of its shell; I just don’t know when. My “sense”, of course, tells me it is coming. So go figure.
Btw, recent publication from Pharmaceutical Manfacturing (click to see article) titled “Plant Transient Technology Expedites Scale-Up” confirmed to the world that plant-based pharmaceuticals worked more effective than the ones from CHO (Chinese hamster ovary). Below is an excerpt from the article (Bold and underlined are my own emphasis):
iBio CMO produced three anti-viral antibodies between 90 percent and 95 percent purity within two months. All antibodies were glycosylated, and revealed a consistent glycoform pattern: one major glycoform and two to three minor glycoforms, which is important. A stable glycosylation pattern means a straightforward scale-up to commercial production.
In the literature 1,3-fucosyl and b1,2-xylosyl knockout plants have resulted in high glycosylation homogeneity and exhibited 20- to 35-fold increase in biological activity compared to its CHO-produced counterpart (Cox et al., 2006). In this case, plant-made products are tested against a CHO-made counterpart in a controlled mice survival study. A comparison was made for the antibodies’ efficiency at protecting the mice infected with the dengue virus in a side-by-side trial. The plant-made anti-dengue virus antibody significantly increased the survival time of infected mice compared to those treated with the CHO-based product (see chart). Research continues to determine the mechanism of this improvement.
Defined goals were achieved by demonstrating the production of monoclonal antibodies from gene to protein in three weeks, and about 1 gram of pre-clinical material was purified and released in five to six weeks. The transient expression of a selected anti-viral antibody can be further manufactured to kg quantities within two to three months, if required.
Now you know why I kept adding when price dropped lower.
Btw, from the weekly chart above, price found support on the uptrend line. So we could be seeing a bounce from here.
Hey, you forgot $ARTH!
No, I’m just saving it for the last…Well, this little baby which I had rode for a bit slightly more than a year is coming to a final chapter in my book.
Whoa! What give!?!
You know I only had free shares from my last week post. However, recent event at the $SCYX spooked me silly that I lost my marbles and decided to close my position. It is like I got a sudden “fear of flying” in the Arch’s airplane. But hey, don’t mind me here. If you like to fly Arch airline, by all mean. I’m sure you know that there are always some “fear of flying” people on those past airplane ride you had. And you are still here sound and safe.
Basically, my fear of Arch is strictly personal and have no bearing on the speculative nature of the stock.
So what’s up with $SCYX that spooked you so silly?
Glad you asked. Well, they have positive result and no SAE (serious or severe adverse event) and yet the stock plummeted 24% thanked to the normal adverse events such as diarrhea, nausea, vomiting and abdominal pain.
Below is an excerpt from $SCYX news on their result:
There were no severe or serious adverse events in any of the three treatment groups, and there were no discontinuations. While a considerably higher rate of gastrointestinal-related adverse events (diarrhea, nausea, vomiting and abdominal pain) were reported in the SCY-078 treatment arms as compared to the fluconazole arm, all events were mild to moderate in severity and transient in nature, with the majority of the events lasting one day or less after the initiation of SCY-078 dosing.
Because of this reaction to $SCYX positive result and no SAE which caused a 24% drop in price, I started asking innocent questions like, “What if AC5 caused itchiness? Sure, it is not SAE and no serious harm can come from that; but what if patients complain about being itchy and want to scratch the area badly?” I think “itchiness” is a normal adverse event as in diarrhea or nausea under the $SCYX drug reaction. Will price crash because of this normal adverse event? My creative mind began to think that it could. I don’t think anyone will want to put something on their skin and then feel the urge to scratch it all the time.
Wait! You don’t know that AC5 is going to cause itchiness!
Very true! I really don’t know! But it is a risk factor that I’ve to take into consideration after the $SCYX negative reaction on normal adverse events. Because I’m already a bit disenchanted from Arch due to their early dilution before the human trial is completed, I decided to liquidate my free shares and move on. Again, don’t mind my personal concern on these matter here relating to Arch’s AC5. I could be 100% wrong and those who own shares may go on to make a whole lot of money; but I’ve got to go with my own analysis and my “feeling” that come from my analysis. If I don’t feel comfortable, I should get out.
The key point here is “my personal analysis”, not because somebody else said this or that. It is my own creative thought process that comes up with the itchiness issue. This may not be an issue at all but I can’t stop my mind focusing on that. Before $SCYX reaction, I probably wouldn’t think much of the itchiness issue. It is because of $SCYX reaction to normal adverse event that the itchiness issue becomes dominant in my concern.
As of now, I’m flat and have no position on $ARTH.
Hey, I heard that!
Anyway, this week of my re-entering back to the market with $MTCH, $AMRN, and $CERS was a mixed result. I am ahead in $MTCH, slightly ahead in $CERS but miserable in $AMRN. $IBIO continued correction did not help either. So my week ended slightly down.
Main port (no margin): MTCH CERS IBIO and 13% cash. (up 27% YTD)
Trading port (with margin): Replaced ARTH with IBIO.
My 2 cents
Btw: I posted my trades within reasonable time in my twitter tweets. (https://twitter.com/tradingmy2cents)
From my camera: