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

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!

SP-500_Daily

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.

AMRN_weekly

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.

CERS_daily

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.

Oop again!

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

Yahoo message board link

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.

CERS_monthly

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.

MTCH_weekly

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!”

“Yes Sir!”

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.

IBIO_weekly

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):

RESULTS
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.

Current positions:

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:

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Categories: Daily trading Journal, trading journal

Tags: , , , , ,

7 replies

  1. ARTH: Well I think your safe to be out till August. They have just trialed their last patient and reckon 30 ish days to submit data, plus add a bit for CE to review. Then the fireworks or funeral pyre ! But Im curious to know why you chose to cite ‘itchiness’ as a possible issue. All scabbing causes itchiness, AC5 or no …or have you been looking at 3D’s ‘trail’ data?

    • Hi Alan,

      Like I said, it is my creative thinking that comes up with the issue of “itchiness”. The thought just popped up while I was brainstorming about possible normal adverse effects that the market may see as negative. I’m not referring to the itchiness from scabbing ’cause these itchiness are low grade. Somehow, I got the idea that when the AC5 peptides form a scaffold around the skin that included the exposed area, it may cause a mild sensation to the area where the scaffold attached themselves to with more sensation to the nerve ending of the cut area. Remember, these are just my innocent thought as in “I’m clueless”. I’ve not looked at the 3D ‘trail’ data and I probably would not understand the data even if I had. Because of $SCYX’s 24% drop due to normal adverse events, my own innocent thought on “itchiness” simply triggered my mental stop and I exited my Arch position.

      My basic investment principles has evolved over time. Below is my guiding principles in managing my portfolio.

      – Watch the SP500 to monitor the possibility of a major storm coming
      – Buy stocks that have tremendous potential and that I “feel” very comfortable with BOTH the fundamental and the technical
      – Continue to monitor the development of BOTH the fundamental and technical of the stocks I’ve position in by reviewing new data coming in
      – If at any time new information (news, technical development on chart) create “uneasiness” on the stock I’m holding, consider reducing the risk or eliminate the risk entirely
      – The purpose of ANY stock I selected is to produce gain for my portfolio based on my personal assessment of the probability of success of the stocks I selected
      – Because of the above, if I don’t feel “right” about the stock I bought because of new information (mentioned above), regardless of rather I’m right or wrong about my “feel”, get out.

      For those who follow my blog for awhile, you can see my stock selections have changed quite a bit. Here is an example, I used to be very positive with $DMRC and had loaded it up in size for the portfolio. After many failed attempts to stay above $30 technically speaking and the slow uptake of companies signing for their Digimarc barcode, my “feeling” for the stock changed and I’m no longer holding $DMRC.

      Another example is $LRAD. Although I made money on this stock overall, I gave back quite a bit when the company failed to win a major contract in one of the large Middle East cities. Come to think of it, it is because of my “carelessness” in this trade that prompted me to become even more diligent in my assessment of my existing portfolio. After announcing that the company had a “high probability” of getting the Middle East city contract due to their “superior” technology, delayed of the purchase decision by the Middle East city dragged on for almost a year and I made the mistake of not being skeptical for this delay which resulted in my giving back gain.

      Because of the LRAD’s lesson, I begin to be more skeptical if new fundamental information or technical development don’t sit right with me. Although I’m not always correct in my assessment, it does help me in reducing my exposure.

      Like I said before, Arch first news update that caused me uneasiness was the early dilution before human trial is completed. They are so close to completing the human trial and yet they are not confident enough to wait for the human trial to complete before raising equity as better price point; then why should I swing-for-the-fence waiting for their trial result? With early dilution, it reminded me of LRAD’s delayed decision from the Middle East city. With LRAD, something did not sit right with the delay but I bought all the excuses provided by LRAD quarterly update and ignored my own “feeling”. I’m not going to make the same mistake this time with Arch. Again this is a very personal trading decision on my part and my opinion on the matter is what prompted to exit my free shares to go flat. If I miss the boat, so be it.

      But then again, if you reread my principle above, I’m not relying on ANY one stock to bring success to my portfolio. I’m relying on the stocks I still have in my port that I still feel comfortable to do the job. So what if I miss the run on Arch if $IBIO can do the same job for me?

      It is all about my personal probability assessment of which stocks I think will bring me success in my portfolio. And I only want to hold the ones I’m comfortable with based on current fundamental and technical development.

      Btw, the purpose of my blog is to share my thought as well as keeping myself grounded to the principles I’ve. It is to keep myself honest.

      Good luck to your Arch investment.

      • Re Ibio: Im assuming that like me, you know little about the science angle. Somewhere in your intro you say something like ‘If youre here to exploit catalysts, youre in the riight place”
        Despite its claims, Im told IBIO has done no trials of the peptide E4 and has none scheduled. It has a $54m mc with $22m in cash. Apart from 2 spikes, the chart has been flatter than an ironing board since 2009. What catalyst do you see for IBIO that is likely to move the needle significantly this decade? My gut feel is that they are just having fun studying some interesting stuff in-house, but with no eye on seeking CE/FDA approval or commercialising it. Im fascinated to know whats causing your tummy to rumble. Theres got to be more to it than just an involuntary ‘feel’ thing,
        Best
        Alan

      • Regarding IBIO, these are highlights I like:

        – with a market cap only slightly higher than ARTH (54m vs 47m), it has $22m in cash compared to ARTH of about $5m (after recent dilution)
        – they have the backing of Kenneth Dart, an heir to the Dart Container (Styrofoam cup) fortune
        – their planted-based manufacturing is the real deal (see published article from Pharmaceutical Manufacturing) and is the foundation for my long-term hold on this stock
        – The catalysts are numerous and are depending on the state of emergency in the next pandemic attack.
        – the peptide for fibrosis treatment is definitely a big plus if they can get it going but iBIO is ready and available when somebody discover a cure for Zika (or any other pandemic disease) that needed doses quickly.

        I don’t know who your source is that stated iBIO hasn’t done anything but is just having fun studying stuff in-house; but you are entitled to form an opinion based on your source which is no difference from my forming an opinion on ARTH giving my own personal assessment.

        The way I see this, last year we have ebola scare, this year, we have zika. Who know what is next? But iBIO will always have the technology to create vaccine quickly and effectively if the need is called for. And that is why I like IBIO.

        Cheers!

      • Interesting….Ill look deeper. Thanx

      • Check out recent news from iBIO:
        http://finance.yahoo.com/news/texas-m-university-system-ibio-123100679.html

        Texas A&M University System and iBio Execute Joint Development Agreement for Plant-Produced Pharmaceuticals

        Below is an excerpt from the above news (Underlined emphasis is my own):

        The iBio CMO LLC leadership team has worked with TAMUS over the last 6 years to establish a renowned bio-manufacturing ecosystem at Texas A&M that included construction of the iBio facility; winning the Center for Innovation in Advanced Development and Manufacturing (CIADM) contract; and build out of a workforce development program with The National Center for Therapeutics Manufacturing (NCTM) at Texas A&M. iBio and TAMUS’s Institute for Infectious Animal Diseases (IIAD) are already collaborating on therapeutic products for use in treating infectious animal diseases.

        Now check out this website:
        https://www.medicalcountermeasures.gov/barda/core-services/ciadm.aspx

        DEPARTMENT OF HEALTH AND HUMAN SERVICES’ CENTERS FOR INNOVATION IN ADVANCED DEVELOPMENT AND MANUFACTURING
        (HHS-CIADM)

        Below is an excerpt from the HHS-CIADM link (Underlined emphasis is my own):

        To date BARDA has funded three Centers with contracts capable of renewal for up to 25 years, representing a long-term commitment to this partnership with industry and to national security. Under these contracts, the HHS CIADM performers will retrofit existing facilities, or build new facilities to incorporate flexible, innovative manufacturing platforms that can be used to manufacture multiple products. These facilities will be capable of using modern cell- and recombinant-based vaccine technologies that have the potential to produce vaccines for not only pandemic influenza but also other threats more quickly and economically.

        Emergent Manufacturing Operations Baltimore LLC, with facilities in Baltimore and Gaithersburg, MD, will lead one Center, working with a network of partners; Michigan State University, Kettering University of Flint, Michigan, and the University of Maryland, Baltimore. This contract is for approximately $163 million over the first eight years. More Information (HTML)

        Novartis Vaccines Division will head a second Center, leveraging existing public-private investments by HHS in a state-of-the-art, multi-purpose facility in Holly Springs, NC, and working with North Carolina State University and Duke University. The Novartis contract is valued at approximately $60 million over the first four years. More Information (PDF 60KB)

        Texas A&M University System will lead a third Center collaborating with GlaxoSmithKline Vaccines of Marietta, PA, Kalon Biotherapeutics of College Station, TX, and their extensive network of institutes. This contract is valued at approximately $176 million over the first five years. More Informantion (HTML)

        Establishing the centers achieves a core recommendation cited in the 2010 Public Health Emergency Medical Countermeasure Enterprise Review; a comprehensive, government-wide review called for by Secretary Sebelius to address challenges encountered in developing biodefense medical countermeasures. These centers also address concerns raised by the President’s Council of Advisors on Science and Technology in the August 2010 Report to the President on Reengineering the Influenza Vaccine Production Enterprise to Meet the Challenges of Pandemic Influenza, which called for flexible, nimble, and modern vaccine manufacturing technologies.

        I guess it is safe to connect the dot…

      • Have your source checked out this news update from IBIO?

        Scientific Insights Into IBIO-CFB03 Presented at American College of Rheumatology Annual Meeting
        http://finance.yahoo.com/news/scientific-insights-ibio-cfb03-presented-133100113.html

        Below is an excerpt:

        “Research teams at the Medical University of South Carolina, Novici Biotech, and iBio have been working diligently and successfully to decipher the mechanism by which endostatin-derived peptides improve fibrosis,” said Terence Ryan, Ph.D., iBio’s Chief Scientific Officer. “Data on this mechanism of action have been confidentially disclosed to the FDA and details will be publicly disclosed in an upcoming peer-reviewed scientific publication.”

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