Weekly thought on $AKER, $AMRN, $CARA, $DMRC, $IBIO, $SEED

Seeing that last week was quite dull, the market decided to entertain us this week with some see-saw actions.  Basically, the market seems to be saying,

“Hey, here is the see-saw to keep yourself busy while we are planning for the next move…”

SP-500_weekly

The SP500 weekly chart formed another doji-like bar with a longer tails on both end compared to last week.  It could as well be another “pause” before more advance.  Or it could be a top.  However, giving that the Presidential election is only a few months away, I’m betting that the market will continue to head higher.

My port also saw some see-saw actions; one position went down but others went up. (One even had its own see-saw action!)  I also reallocated my position size between two positions in my port.

Which two?

Let’s start with $AMRN and $CARA.

Amarin opened higher on Monday and so did Cara, but I felt that I might be over-weighted with $AMRN since I’d double-down the week before so I sold some to reduce position size.  The good thing is that with the price increase on Monday, I was able to reduce my position size and still maintain the same average cost basis price on $AMRN.  I then used the proceed to add more $CARA.

I like $CARA for its eventual domination of the non-addictive painkiller market.  Of course, it has yet to be proven that CR845 works as intended.  But so far, all earlier clinical Phase I & II trials have shown encouraging results.  While the odd of success in Phase III trial is still a 50/50, I’m more inclined to bet that it will work.

What I really like about Cara is its ability to transform the painkiller industry overnight if CR845 works as intended.  For the safety of the patients who suffered severe pain, CR845 would be the preferred painkiller option from doctors across the globe.  Doctors are tired of the insistent and persistent calls from patients asking for painkiller refills that have gone beyond the healing period.  They are tired of hearing that their patients who came for simple surgery had died of overdose of painkiller due to addiction.

Giving my perspective that CR845 has the ability to transform the painkiller industry, I’m constantly baffled by the fact that $CARA is still trading at the $5 -$6 range.  I believe the market eventually will see the light and price will rise accordingly.  Since trial results won’t be available until next year, the 7.5% short interest still have plenty of time to exit their short position before risking the mother-of-all short-squeeze in the event that CR845 is an astounding success.

Thus, on Monday, I reallocated capital to bump $CARA to the fourth position and $AMRN back to the sixth position.

I know, I know… By Friday, I’m looking like a fool ’cause $AMRN ended the week up while $CARA went down.  But that is the way the market works, it doesn’t give a flying hoot of what we do or don’t.  The good news is that sometimes I do ended up with perfect timing; so this week not being in my timing is fair game.  Let’s look at charts…

$AMRN

AMRN_weekly

Amarin weekly chart looks healthy on the bull side.  Last week down momentum was stopped completely and it took little volume this week for the bull to take it back up.  In other words, look like the the heavy selling was pretty much done.  Oh yeah, there was this mystery rally on Friday that somehow pooped out by closing bell.  And we still have no data on last week script numbers either.  This is indeed an odd week for Amarin.

$CARA, on the other hand, had a bad week after the initial spike on Monday.

CARA_weekly

But on the weekly chart above, price is still within range of the last four weeks. Basically, Cara is still range-bounded waiting…

Waiting for what?

Anything I guess.  Between now and next year trial results, it is my 2 cents that price will begin to rise due to speculators/investors coming back to bet on CR845 trial results for both the post-op pain and uremic pruritus.  Not to mention that shorts may start to cover along the way.  I made additional bet by buying $CARA Nov 2016 $10 call options.  Sure, I could end up looking like a fool holding worthless option comes November or I could be quite a happy camper.  Either way, I placed my bet.

$DMRC had quite a see-saw action this week.

DMRC_weeklyLook like price is getting ready to break the resistance at $37.50 level.

Interesting that I’m no longer concerning myself with Digimarc price volatility like I used to.  I feel very confident that Digimarc will eventually get adopted.  And price action this week shows that I’m not the only one thinking this way.  Basically, Digimarc has come a long way to where it is today.  The momentum of getting Digimarc barcode accepted into the retail industry is getting stronger and stronger.  Here are the proofs:

  1. Major scanning vendors already included the capability to read Digimarc barcode in their new digital scanners
  2. GS1, the godfather of the barcode system, is backing the Digimarc barcode and even coined a name for the Digimarc barcode in their system called the “DWCode

I can go on with other supporting proofs but I believe the two above are significant enough to make my point across- I’m betting that Digimarc barcode will eventually get adopted.

$IBIO was able to halt last week down bar with a nice green spinning top bar

IBIO_weekly

As seen in the weekly chart above, price is now consolidating around $0.65 cents.

Fundamentally speaking, iBio recently issued a press release, “Implications of Court Decision in Favor of iBio Against Fraunhofer.”  This is great news ’cause it eliminates one of the thorn stuck in Ibio’s feet.  Yeap, it is still a waiting game and nothing has changed in my position regarding iBIO.  Holding long and strong.

$SEED is showing more traction this week.

SEED_weekly

From the weekly chart above, price bounced back into the uptrend line.  With the China’s five year plan to adopt GMO seeds, and with the new highly qualified CEO, CFO, and CTO taking over the helms at Origin Agritech Ltd (aka $SEED), I can’t help but feel confident about Origin Agritech’s future prospect.  The next time we hear about a partnership deal from Origin Agritech, I bet we will see $3 then.

And the one that brought home the bacon this week is $AKER.

AKER_weekly

Look like $AKER is ready to take out the $3.50 resistance soon.

There is a new development that might explain the Friday rally in $AKER.  While it is not being released as a press release, it is accessible at SEC Form 8-K filing.  Below is an excerpt from the filing:

“Pursuant to the Settlement Agreement, all of the Disputes have been settled and all of the proceedings related to such have been dismissed. Under the terms of the Settlement Agreement, the Company will recover the full outstanding principal amount of the Note during the 2016 fiscal year in the form of $750,000 worth of BreathScan® Alcohol Detector stock to inventory (which the Company intends to subsequently sell) and $500,000 in cash (the “Cash Payment”). In addition, the Settlement Agreement also allows the Company to market and sell all of the Company’s breath technology tests worldwide, unencumbered by any past and/or future claims by Chube under the Licensing Agreement. Pursuant to the Settlement Agreement, Chube no longer holds any rights pertaining to the Company’s BreathScan® technology.”

Wow! That’s an additional $500K cash going back to Aker.  What it might means is that Aker may become cash flow positive earlier than expected.  The additional $750K inventory will surely help as well.  And to top it all, Aker now has the worldwide right to sell its breath technology tests.  This is definitely a bona fide long term hold for me here.

Despite see-saw actions on my port this week, the gain from $AKER, $SEED, $AMRN, $DMRC, $IBIO are more than enough to offset drawdown from $CARA.  Thus, my port is able to gain back a few % for this week.

Current positions:

Main port (no margin): IBIO  AKER  SEED  CARA  DMRC  AMRN and 3.2% cash. (up 45% YTD)

Trading port (with margin): IBIO down 0.3% on position only and up YTD on port

My 2 cents

From my camera:

Sunday Home Depot 007

 



Categories: Daily trading Journal, trading journal

Tags: , , , , , ,

2 replies

  1. At first sight, I wondered what the heck you were doing in $IBIO……a pre-clinical uni-product company (did I miss something?) thats been range bound for yonks. But having read your posts for a few weeks, I sort of understand some of the benefits of trading a rangebound stock…..the waves are less violent and more predictable, so you can snaffle a few scheckles here and there. I guess your primary focus is the safety and controlled growth of your overall portfolio, which is v sensible. But theres no way this stock is ever gonna make you rich in a hurry. Youre clearly a very careful and patient man. (nothing wrong with that)
    Of the others, $CARA’s chart looks most interesting to me. Im a bottom fisher by nature (ie a mean and tight fisted tyre kicker who only likes to buy stuff when its ‘on sale’. Perhaps Im a distant relative of Warren B ?). It appears to have found a bottom and its 20 MA looks finally to be heading north, with plenty of room to run. I couldnt find out what happened to it in Aug 15, but it sure took a hit between then and Feb16. In the non addicive drug arena, a friend has pointed me toward $TRVN.This also seems to have recently found support and has a rising MA…..coincidence?? Whichever, society is certainly crying out for some non-addictive pain relief.
    Re your portfolio……you seem to limit it to ~5 stox. (I assume this is just for the trading journal and youve got several millions in blue chips 🙂 ). Having had dozens at times, Ive come to the conclusion yours is the better method for trading. You simply cant monitor the daily news/movements of 20+ unless its a full time job, and its always the one youre not watching closely, that suddenly dives…..strangely they never rocket.

    Thanks for all your hard work here.
    AlanH

    • Thanks for the perceptive comment. “Safety and controlled growth” sound about right giving what I’ve been doing lately but my real focus is more like “safety and perpetual growth.” That is the main reason why all my picks are still “babies” in term of market cap. I’m constantly juggling my port looking for those seeds that have the potential to grow into a giant tall trees. When I think I found them, I’ll do my best to hold on to them despite my inclination to trade them when profits or losses are presented to me on a regular basis.

      I like to remind myself from time to time that if I get out of a stock for safety reason, I’m risking being out of a position due to difficulty of buying it back without chasing the price. If you pay close attention, despite $CARA selling off, there are always decent size bids to absorb the selling. These bids are not hungry bids. They don’t mind the price correcting; in fact, they simply lower the bids to see how low they can go. In other words, they want to buy cheap. My take is that this stock is being accumulated. Accumulated by those who sold at the upper range and those who want to build a position for the ultimate bet. At some point, I’ve to draw a line and say, “Ok, no more monkeying around the stock. The stock should be ready to move and this is the time to hold tight so you don’t miss the train.

      Thus, it’s always a tough battle between safety and aggressive. Sometimes I got it right and sometimes I got it wrong.

      Your propensity to bottom fishing is also part of my trading tactics. That is how I captured gain in $GWPH, $CARA, $MTCH, $AMRN and $SEED this year. Patience is not only on waiting for the stock to break out of trading range, but also in waiting for the stocks you want to buy to settle down into a basing pattern before you buy.

      Yes, I only like to manage a handful of stocks in my port; but the caveat of doing so is that you are subjected to larger swing since each stock is now heavily-weighted by normal standard. Instead of 20+ stocks to smooth out the volatility, you port is subjected to the volatility of only a handful of stock. Furthermore, I need to spend even more time to manage them, not less. At least, I’m more productive in being aware of my fewer positions instead of being unproductive in trying to manage 20+ stocks. With few stocks, I’m able to see any weaknesses, fundamentally or technically, of each stock if any. In fact, having too many stocks can make me more complacent ’cause there is just too many stocks to deal with. Also, the lessons I learn when managing few stocks are much more significant and meaningful that it change my trading style for the better. Of course, this require 100% commitment to learn and improve my trading skills. In other words, it is very dangerous to load up your portfolio with only a few stocks if you are not willing to spend the necessary time to manage them. Even when you are managing them, you are subjected to the greed and fear that will rear its ugly head so more awareness and discipline is required to stop yourself from destroying the port.

      Making myself more responsible and disciplined is one of the reason I’m writing this blog. Knowing there are readers on my blog forces me to stay truth to my goal. Skirting discipline ’cause no one is watching is no longer an option. By posting my trade at twitter and discussing them in my blog, I create a counter-balance against my innate emotions (greed and fear) to weave havoc on my port. It also requires me to do “sufficient” due diligence to justify my positions. By my weekly thought on this blog, I’m reminding myself why I’m in the stocks. So, it is all part of the infrastructural supports that I’ve created to help me stay truth to my path. The hard work, as you mentioned, is all part of the commitment I’ve in my trading endeavor. The nice thing about this infrastructural supports I’m using is that I can share them here.

      When I was younger, I wished someone was writing blog like I’m doing now so I could see what it was really like trading. In fact, there was a blog I like but the owner of the blog dismantled it after one week of my exposure to it. So I told myself I would write a similar blog when I’m ready.

      Cheers!

      My 2 cents

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