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

I guess we all know that a correction is due since we made new historical high not too long ago.

SP-500_weekly

This week small correction may frizzle out or it may test the support @ $2,134.71 established back in mid-May of last year.

I made a few changes in my port to adapt to the changing market environment which included a repeat of last year political soundbite over the sky-rocking price increase of a life-saving drug- only this time, thanks to Mylan, it is the life-saving allergy treatment called the EpiPen.  Suddenly parents who have high deductible in their health insurance is now facing a $600 price tag for a pair of EpiPen. As a result of political soundbite, the biotech sector is again going thru some convulsion.  Last year, I waited too long to exit my biotech holdings after Martin Shkreli hiked the price of toxoplasmosis treatment Daraprim from $13.50 per pill to $750 per pill; as a result, I gave back more than necessary.  This time, I’m not going to make the same mistake twice; thus, I reduced my position size of the $AMRN and $CARA to starter position.  Of course, I’d to take some losses to do so; but I’ll rather take a smaller losses now than to wait for this political firestorm to wreak more havoc on the biotech companies’ stock prices.

There is no doubt about a bigger issue in the healthcare industry when companies can simply raise the prices of life-saving drugs to such exorbitant amount that the only way to find relief from patients who could not afford them with their high deductible health insurance is to create a public outcry.  The outcry could not have come at a better time since we are in the midst of a major U.S. Presidential election.  Hillary, again, took the initiative and declared, “That’s outrageous!”  Now, what is the odd of this political soundbite dying down from here when November is only a few months away?

Thus, I lightened up my holding on $AMRN and $CARA and will be looking to buy them back cheaper if possible.

“Hey what about $IBIO and $AKER?  Ain’t they also related to biotech?”

I actually sold some $IBIO this week not because of the political soundbite but ’cause I needed the cash to buy more $DMRC.  I still hold plenty of $IBIO but it is no longer the largest position in my port.  It is now the fourth largest and is still a “swing-for-the-fence” speculation.

“Really!?!  What’s going on with $DMRC that you’ve to peel off some $IBIO to do so?”

Take a look at the $DMRC daily chart below:

DMRC_daily

Starting from Tuesday, price began to climb everyday that by Thursday I just felt the “urge” to buy more.  I added some in the morning and, by the afternoon, I became even more convinced that I did the right thing so I added even more.  The rally on Friday validated my additions on Thursday.

With $DMRC rally this week despite a general correction of the market, I believe more and more investors are convinced that the adoption of the Digimarc barcode is simply a matter of time.  With the advent of smartphone being the most heavily used mobile device globally, it makes no sense not to take advantage of what Digimarc barcode has to offer.  In other words, Digimarc barcode adds tremendous value to the retail industry by allowing a direct digital link using the product packaging.  Consumers can simply point & shoot at the packaging regardless of the product orientation at the shelf with their smartphone and learn more about the product; not to mention that a “smart shopping cart” can also automatically scan the product once customer place the package in the cart.  In fact, I believe it was this new piece of information that gave me the confidence to add more on Thursday.  Below is an excerpt from an article, “Wal-Mart CEO: Sam’s Club Shoppers Can Skip Cashier” that mentioned Walmart and Digimarc is working on a smart shopping cart:

“Given Wal-Mart’s priorities and its diverse customer demographics, cashiers aren’t going to be replaced by mobile scan and payment technology anytime soon. But Wal-Mart is working on a range of such technologies, such as a grocery cart that scans every item in a collaboration with Digimarc (DMRC).”

Bold, blue, and underlined are my own emphasis.

While this is still a “work-in-process” product that is far from being an actual product itself, you simply cannot dismiss the vision that this is indeed where our future is heading.  If you think about this a bit, you know that the ONLY way a smart shopping cart can do what it is designed to do is to have the ability to read the product package in any orientation at the time the products are “dropped” into the shopping cart.  The Digimarc barcode is basically an invisible UPC barcode that are printed ALL OVER the packaging that any scanners on the shopping cart can read the barcode immediately.

My 2 cents is that this recent article is simply another circumstantial evidence that the Digimarc barcode is an “indispensable” technology for our futuristic digital world.  Hence, $DMRC is now my largest position in the port.

“Ok, what about $AKER?  I see you didn’t lighten that one either.”

Ha! Actually I believe $AKER is falling in line with the current political soundbite since it is selling cheaper medical diagnostic tests (with rapid results!) than the current established similar diagnostic testing products.

Since I already own an over-weighted position size, I’m simply going to hold it for long-term.  Right now, I’m content to watch this $AKER seed and see how big a tree it is going to become. It is my opinion that any change in the healthcare industry brought on by the current political climate is going to have something to do with cost. Akers Biosciences will be there to provide cheaper tests with faster results to the healthcare industry. Yay!

AKER_weekly

The weekly chart above is very bullish.  Price is about to break out of the $3.50 resistance and $3.91 is next. In fact, a breakout from here will be qualified as a Cup & Handle breakout.  From my observation, Cup & Handle usually precedes a long-term trend in the direction of the breakout.

However, I did add to $SEED this week.  With all the take-over talks over “Monsanto, Bayer potential merger“, companies that deal with GMO may rouse up like jumping beans in the coming weeks.  Another round of consolidation in the GMO sector may be happening and it is my 2 cents that Origin Agritech (aka $SEED) is going to be a part of this as well.  With China opening their door to GMO in the coming five years, there are a lot more at stakes for the fewer players.

seed_daily

From the daily chart above, you can see that $SEED has some heavy volume on Tuesday and Wednesday.  Although Wednesday was a down day, most of the volume came from the up bars in the 5 minutes chart.  So, I’m guessing that some big players came in to make some bet at $SEED.

So far I’ve three exciting positions in my port- $DMRC, $AKER, and $SEED to look out for future growth.  All made gains for my port this week.

The other three ($IBIO, $AMRN, & $CARA) are biotech which may not be so exciting in the coming weeks due to political firestorm.

$IBIO dropped slightly for the week but still range-bounded.

IBIO_weekly

Unless news come out in the near-term, this is simply a buy-and-hold play for catalysts to reveal itself in time.

$AMRN is either forming a double-top or a handle for the future Cup & Handle breakout pattern as shown in the weekly chart below:

AMRN_weekly

There is no doubt that the coming interim Reduce-it result will determine the major direction of $AMRN.  A surprise stopping of the trial due to efficacy would be a major win but that is still a BIG IF.  Without stoppage due to interim result, I believe we will still see a slow upward path depending on the growth rate of weekly script #.  Although I’ve a starter position, I’ll let the chart gives me clue in the following weeks as to when to add more.

$CARA also could not escape the political firestorm and price dropped along as well.

CARA_weekly

From the weekly chart above, there is still a trendline support for the price to bounce.  If it bounces from here, I may begin to add again to bring it back to standard position size bet since I’d reduced it to starter position size this week.

Despite a bad week with draw-downs from $AMRN, $CARA, $IBIO, gains from $AKER, $SEED, and $DMRC helped reduce the amount of drawdown to a tiny %.

Current positions:

Main port (no margin): DMRC  SEED  AKER  IBIO  CARA  AMRN and 13% cash. (up 43.5% YTD)

Trading port (with margin): IBIO down 3% on position only and up YTD on port

My 2 cents

From my camera:

Friday afternoon 028

 



Categories: Daily trading Journal, trading journal

Tags: , , , , , ,

2 replies

  1. Nice analysis….still a lot of resistance to GMO in India, but the future is coming.

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