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

The market finally had a week of correction that made you pause for a second.  Although a down week, price did fight back to regain half of the week losses as seen by a long-tail below the red-body.

SP-500_weekly

It is important that the bull do something next week to regain the momentum to the upside before allowing the bear to press for the weak spot to break the dam… So far, the bull did a good job bouncing off the weekly 79 MA support which also happened to be the 2015 year-end closing price support.

This has been no doubt an exciting week for my port with two of my stocks experiencing a sudden influx of buyers.

$MTCH rallied hard on Tuesday after taking out Monday low.  The sudden rush of funds coming into the stock was quite thrilling to watch. $15 was a hard resistance that price could not reach for four weeks since $15.40 was reached in May 12th. Then on Tuesday June 14th, while watching price action taking out the low of previous day after market opened, price began to recover a bit but meandering around $14.3x for a couple of hour.

Bang!

In ten minutes, price bounced 30 cents to the upside from $14.3x mud land to $14.6x in a stronger than normal buying action. I could feel an air of excitement when the expected sell-off to bring price back down to $14.3x did not happen.  Instead price was attempting to rally higher in the next three hours from the new support of $14.6x and then fell back when price hit $14.7x.  Even with the failed attempts to breach $14.7x resistance, I could sense the buying actions underneath.

BANG!

Just like that, at around 02:30pm Eastern Time (ET), the massive buying forces began to flow into the stock and price kept going up and up.  In fifteen minutes, price breached the $15 resistance and a fury of buying forces kicked in to drive price even higher and faster.  Just when you thought the run was due for a rest and called it a day, price continued to surge ahead as if there was a tiger chasing behind it.  Price reached $16 from $15 with zero resistance hindering the upward momentum.  It was a very powerful rally to witness.

“WOW!” was all I could muster inside my head.

MTCH_5min

To appreciate the magnitude of the move, above is the 5-minutes chart showing mostly the price action of June 14th.

It was after the huge rally on Tuesday I realized that if I did not have a position, I might as well miss the ride ’cause it was very tough mentally to try to chase a hard fast rising price unless you were being squeezed from a short position.  Even the two hours of consolidation in the $14.6x range could be filled with indecision ’cause one could be wondering if this was a temporary aberration.  Thus, I decided that I would not take profit at the $16 resistance.  Of course, hindsight on the correction from Wednesday to Friday made me wonder about the wisdom of that decision.

While hindsight has a way to make a fool out of me, I also realize that in order to stay with the long-term rally, you really could not afford to be dilly-dally trying to time the market.  Tuesday action is a wake up call that market could run away suddenly and quickly without me on board if I happened to be “out” in my attempt to “time” the market with trading action.

So I took comfort knowing that Tuesday rally offered me a big cushion in the coming volatility in my pursue of $MTCH long-term rising price.  In a way, staying with the long-term bull run is no difference than riding a bull in a rodeo.  The bull would attempt to shake you out of your position and you would attempt to ride it as long as you can without falling off (and thus miss the long-term ride).

Back to the weekly chart below:

MTCH_weekly

Price found support at the $14.80 level which is also the high of previous week. From the weekly chart, price is bouncing off the recent short-term uptrend line.  Let’s see if the bounce can continue on next week.

Fundamentally speaking, I’m looking forward to the 2nd quarter earning update.  I expect to see Match Group beats earnings.  The recent article about doubling paid subscriber numbers is, in my humble opinion, a conservative estimate.  I think Match  Group is low-balling the estimate in order to have room to surprise us.  And I also believe that once they start to ramp up advertising revenues, Match Group will achieve consistent high growth due to more and more people discovering their online dating apps in a an ever growing populations of single people around the world.  I believe Match has only just begun to reach out to touch on the massive population of single people out there. In other words, I believe we are still on the ground floor.

$IBIO also has a strong recovering week after last week sell-off.  As predicted, price bounced off the uptrend line and headed much higher in mid-week with good volume.

IBIO_weekly

As you could see, price returned to the 68-70 cents area by Friday close after reaching as high as 75 cents for the week.  However, the weekly chart also shows me that price is about to breakout of the weekly 79 MA resistance soon now that it closed above the weekly 89 MA for the week.

Now, how is it that I’m “feeling” about a break out soon?

 

Below is a list of fundamental reasons that lend support to my “feeling” of a coming rally…

  • Listed in NYSE
    • This is a HUGE plus ’cause when price starts to reflect the true value of the company when news of contracts or positive development of fibrosis treatment, institutional buyers can start to buy. In other words, iBio is trading in a platform ready for prime-time action. Below is a list of some well-known names picking up relatively small shares of iBIO. Why small shares?  My thought is that this will put iBio on their watchlists since it is listed in their live portfolio for owning the stock.
      • IBIO_instit_watchlist
  • Already have a facility ready to manufacture pharmaceutical drugs using planted-based technology instead of the old-fashioned conventional CHO (Chinese hamster ovary).  Recent publication from Pharmaceutical Manufacturing provided a closer look of this planted-based manufacturing technology.  The article was presented in a case study format by breaking down the article in three components- challenge, execution, and results.
    • THE CHALLENGE
      United Therapeutics approached iBio CMO with a challenging project — to manufacture pre-clinical material of three anti-viral antibodies in less than two months — from gene to released product, and compare them to a CHO-made counterpart, in a mouse survival study.
    • EXECUTION
      There were three specific goals:

      1. To produce pre-clinical material of three anti-viral antibodies within a two-month deadline
      2. To release pre-clinical material for animal studies
      3. To compare plant-made and CHO-made pharmaceuticals production time frame and efficacy
    • 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.

    • My comment:
      • Basically, this is NOT a “we are still building the manufacturing plant” but a “we are ready to take your anti-virus antibody formulas and manufacture them in massive quantity quickly and effectively.”  This is why I believe this stock is way undervalued based on its “untapped” capability in the next wake of pandemic attack.
  • Texas A&M University System and iBio Execute Joint Development Agreement for Plant-Produced Pharmaceuticals

    • How much more legitimacy do you need when Texas A&M University System comes on board with iBio to develop plant-produced pharmaceuticals.  Don’t forget that the Texas A&M University System is one of the largest systems of higher education in the nation with a statewide network of 11 universities, seven state agencies, a comprehensive health science center and a budget of $4.2 billion. The Texas A&M System educates more than 140,000 students and makes more than 22 million additional educational contacts through service and outreach programs each year. Externally funded research expenditures exceed $946 million and help drive the state’s economy.
    • My comment:
      • In essence, my 2 cents is that plant-based pharmaceutical manufacturing is the next generation of drug manufacturing and the current stock price has not reflected the massive potential of this company.
  • As of March 31st, 2016, iBio has about $22 million in the bank and the backing of Kenneth Dart, an heir to the Dart Container (Styrofoam cup) fortune, who currently own about 38% of iBio thru his company Eastern Capital Ltd.  Below is a screenshot from Yahoo Finance showing Eastern Capital ownership of iBio as of April 7th, 2016.:
    • IBIO_insider_ownership
    • My comment:
      • I don’t think there will ever be an issue of running out of cash here. With Texas A&M on board, I believe the company is not that far off from getting a contract to manufacture planted-based pharmaceutical in the near future.
  • On June 14th, 2016, patent for “Use of endostatin peptides for the treatment of fibrosis” has finally been issued to the University of Pittsburgh in which the inventor Dr. Carol A. Feghali-Bostwick discovered the endostatin peptides to treat fibrosis.
    • Notice the patent application was filed on  March 12, 2014, a bit more than two years of waiting.
    • My comment:
      •  This very possibly explained the lack of update on the fibrosis treatment from iBIO for such a long time.  It makes no sense to show the world your discovery in details when you don’t have patent (IP) protection.  I believe with this patent approved, it’s a matter of time before update from iBio regarding the status of the  discussion with FDA on IBIO-CFB03 comes to the surface.
      • Btw, this fibrosis treatment, if proving to work, is HUGE and I expect it to add significant price increase to the stock in its own right.
    • Excerpts from April 7th shareholders meeting update are good reminders:
      • “My association with iBio continues to be a rewarding experience,” said Dr. Feghali-Bostwick. “Together, we are expanding the range of possibilities for clinical application of this research, and look forward to soon see the first clinical trial begin.”Regarding further plans and expectations for the fibrosis product development program, Mr. Erwin said, “We plan to request U.S. and European Orphan Drug designation for our product, first with systemic sclerosis and later for IPF. Based on preliminary laboratory data, we are also considering additional indications for other fibrotic diseases. We are optimistic about broadening and extending our fibrosis therapeutics intellectual property and managing this as a program rather than a single product.”

Because of the above, I’m actually very comfortable holding iBio for the long-haul.  From my perspective, this is definitely a “buy and hold” waiting for the two major catalysts-contract to manufacture planted-based pharmaceutical drugs for other drug companies and positive development in fibrosis treatments. My 2 cents is that when one of these catalysts hit the news wire, you’ll have a hard time chasing the stock if you don’t already own it.

Because I added more $IBIO last week when it fell to low 60 cents, it is now my second largest position in the port after $MTCH.

$CERS corrected from last week rally instead of continuing upward.

CERS_weekly

As you could see, although a down week, the overall trend is still up.

At first, I thought about bailing out again to minimize my losses but then I remembered the day I sold half-of-my-position and price went back up afterward.  And the more I review the fundamental of this company, the more I want to ride the volatility of this bull.

Here are some key points why I think price is going to go back up eventually.

Thus, giving the above fundamental development, I’ve decided not to “time” the $CERS trade and just ride out the volatility.

$AMRN took another tumble but with less magnitude and volume than the previous week.

AMRN_weekly

I believe price is going to find support from the weekly 79 & 89 MA lines.

Since $AMRN is a much smaller position in my port relative to $MTCH, $IBIO, and $CERS, I’ve no problem riding this one till September when interim review of the Reduce-it trial will be released.  What I like about Amarin is that their weekly subscription is now over 16K from Friday report.

In summary, I’m finding myself deciding to ride out the volatility rather than trying to time the market to lock in gain or for safety purpose.  I believe the two biotech that I’ve, namely $IBIO and $CERS, have the ability to move upward irrespective of what the broad market is doing because of external biological conditions.  The Zika situation has the potential to ruin the national blood supply if it is not being controlled within a reasonable time frame. The fibrosis update can hit the news wire any time which will provide guidance to the development of the iBio’s IBIO-CFB03 .

By allowing the Olympics to continue, the world is risking an accelerated Zika pandemic attack that is going to affect a lot of babies which will raise outcry to the point where drastic actions have to be taken pronto.  The decision of whether to continue with the Olympics event in Brazil is like trying to balance the force of political , economic, and health issue together.  Giving current sound bites so far, it seems political and economic are going to win the argument to continue the Olympics at the expense of accelerated global Zika infection.  So yeah, I’m going to hold on to $IBIO and $CERS for the rest of the year to see where it goes.

Of course, I’ll also ride $MTCH as much as I can as long as there are no crash in the broad market.

For the week, my port gained slightly despite correction from $CERS and $AMRN thanked to the bounces from $IBIO and $MTCH.

Current positions:

Main port (no margin): MTCH  IBIO  CERS  AMRN and 4% cash. (up 29% YTD)

Trading port (with margin): IBIO (up 4%)

My 2 cents

From my camera:

Purple firework

 



Categories: Daily trading Journal, trading journal

Tags: , , , ,

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