Weekly thought on $AMRN, $CARA, $IBIO, $LEU, $NUGT



light bulb lighting up moment

Do you ever have a moment when suddenly everything seems so perfectly clear to you that you just know what you need to do?  All confusion evaporates at that moment and your conviction becomes unparalleled.  I’m sure everyone of us has that moment one time or another.

Well, guess what?  I’ve one of those moment on Friday morning after witnessing the price action on the SP500 and the stocks I am watching.  It just dawned on me that the general market isn’t going to roll over like I predicted it would do so.  I’m sensing that the underlying strength simmering below the Trump’s “Make America Great Again” is going to rock the stock market much higher in 2017.

What did you witness on Friday morning that caused you to have that flash moment?

There was really nothing unusual about the SP500’s price action since it was quite a slow boring day actually.  It was more of a resolution of my own internal conflict about the market direction.  Last few weeks, all I saw was more deteriorating price action of the stocks I’m monitoring.  But on Friday, I noticed strength on some of the stocks I wanted to buy back in- namely $AMRN, $CARA, and $NUGT.  All three exhibited strong tendency to bounce after market opened.  If there would be a roll over in the general market, these three stocks would be going down, not attempting to bounce.

I was reluctant to believe the bounce at first since I came into Friday morning still holding my profitable $TZA position. However, $CARA was going strong on the get go and I was wondering if the price action would fall back down like it did on Monday. As I continued to wonder, I realized I would be missing out a strong run if I continued to hesitate.  I began to buy/chase the stock after it reached $9.5x. By then, I already closed out my $TZA position to lock in gain and bought more $NUGT due to its strong price action in the morning.  Later on, I also bought $AMRN with the available cash that I had after I bought $LEU.

$LEU? What’s up with that one?

It is a uranium stock that is also engaged in uranium enrichment. Below is a cut and paste directly from Yahoo Finance’s $LEU profile:


Centrus Energy Corp. supplies low enriched uranium (LEU) for commercial nuclear power plants in the United States, Japan, Belgium, and internationally. The company operates in two segments, LEU and Contract Services. Its LEU is a component in the production of nuclear fuel for reactors to produce electricity. The company sells separative work units (SWU) component of LEU; SWU and uranium components of LEU; and uranium for utilities that operate nuclear power plants. It also focuses on deploying the American Centrifuge technology, a uranium enrichment gas centrifuge technology for commercial purposes, and to support U.S. energy and national security. The company was formerly known as USEC Inc. and changed its name to Centrus Energy Corp. in September 2014. Centrus Energy Corp. was founded in 1951 and is headquartered in Bethesda, Maryland.

Source: http://finance.yahoo.com/quote/LEU/profile?p=LEU

Since national security is mentioned in the profile description, I would assume that weapon grade enrichment would be available if requested by the Gov’t.  Basically, I’m buying $LEU in response to Trump’s soundbite regarding a nuclear arm expansion.

Sound a little too quick to jump the gun based on soundbite, don’t you think?

It sure does.  Nevertheless, $LEU is a small cap stock with a tiny float.  So, if there is a whiff of policy change next year that favors nuclear arm expansion, $LEU may become a $20 stock overnight.  So, I’m willing to take a risk with $LEU.  Understanding that the soundbite is only a soundbite and nothing else, I only bought a standard size position.  This is not a swing-for-the-fence bet.  The problem with low float stock is that if there are no catalyst for strong price action, you could be stuck ’cause any liquidation will tank the price easily.

Chartwise, $LEU looks like it broke out of its long term resistance at $5.77 from May 2015.leu_weeklyAs seen on the weekly chart above, price had three weeks of correction back to near $5.77 support area.  It is possible that price may bounce from here anticipating policy change that may trigger demand for $LEU’s enrichment uranium.  Of course, this anticipation is purely my own personal perception on the future and may not necessarily reflect reality if Trump’s soundbite is just simply soundbite.

Next, as mentioned earlier, I jumped back into $CARA.cara_dailyThe daily chart above reflected a strong up day on Friday unlike the failed rally on Monday.  This tells me investors are ready to jump back in.  There are catalysts (trial results) going into 2017 and one must be invested now in order to get a good seat for under $10 buck.  Man oh man, if CARA’s CR845 works and patients can reduce pain without the addictive narcotic effect, this stock can easily go to $200 in a short period of time.  And yet, there is the risk of “does it really work?”  Giving the risk/reward for under $10 dollar a share, I’m playing the bet.

I also got into $NUGT looking for a bounce from a possible bottom.nugt_dailyFrom the daily chart above, I expect the gap $6.27-$6.90 to be filled as a minimum. Afterward, my 2 cents is that inflation fear is going to take care of the rest of the uptrend. With all the cash sitting out there since multiple QE programs, a stimulus package from President Trump is going to wake up these cash.  Suddenly, you’ve too much cash chasing limited resources and Voila, you get inflation.  Never mind my dimestore economic theory, but I believe $NUGT is setting up for another major rebound similar to the bounce from this January to mid-August except that this time price is going up much much higher.  Believe me or not, for now this is what I’m seeing.

I also bought back some $AMRN.amrn_dailyFriday price action action convinced me that the 79 & 89 MA supports are holding.  To me, just ’cause price penetrated these two supporting MAs on the downside is not enough to call it a bear.  The ability of the price to bounce back above these two supporting MAs within days tell me these supports are still holding.  If price continues to bounce next week, I may add more to build up my position.

IBIO also looks to bounce from here as well.ibio_dailyFrom the daily chart above, a bounce from here will kick off Wave 3 of the Elliott Wave Theory.  I expect to see more fundamental development in the company plant-based technologies and Dr. Carol A. Feghali-Bostwick’s fibrosis treatment in 2017.  I believe $IBIO under a buck will be a thing of the past soon enough.  Watch the video again.

In a manner of speaking, I’m slowly getting back in tune with the market.  I now believe that the general market is not ready to correct yet  Thus, I’m buying back stocks that I’m monitoring to see if I can catch the wave.  Of course, I’ll be watching for shark in the water as well.

Happy Holiday to all who is reading this.

Current positions:

Main port (no margin): IBIO  CARA  NUGT  LEU  AMRN and  48% cash. (up 33% YTD)

Trading port (with margin): IBIO down 26% & $MENXF down 34% on positions only and up YTD on port. Holding $GRWG to invest in the cannabis sector.

My 2 cents

From my camera:friday-morning-014

Categories: Daily trading Journal, trading journal

Tags: , , , , , ,

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