Weekly thought on $HIMX, $IBIO

With eight more trading days to go for the month, I don’t think this year is going to support the old but popular saying of “sell in May and go away.”  Perhaps, in the very early years of the stock market history, more often than not, May was the sellers’ favorite month; but statistic in recent history no longer support this saying. I went back to count the number of green monthly bar vs the red monthly bar starting from 1996 and got the following data: 12 green monthly bar vs 8 red monthly bar.  Basically, the global political and economic landscapes have changed so much that the dynamic of the stock market continues to form new patterns.  Despite the big dump on Wednesday, the bounces on Thursday and Friday restored the order of the bullish sentiment.  SP-500_DailyChartwise, the SP500 bounced off the daily 79 MA (dashed blue line). Magical!  Per my observation, the 79 & 89 MA supports continue to show favorite statistic of price bouncing off them.  From the weekly chart below, the SP500 bounced off the 15 MA support.

SP-500_weekly

The long wick below the body of the candlestick showed the strength of the buyers.  As long as there are buyers buying up the bargain, the bull market is still on.

Although we witnessed a nice recovery of the SP500, it was still a down week. And my port also suffered the same fate.

… and then there are two…

In light of the Wednesday free fall, I sold what left of my $CARA position without hesitation.  But I only peeled a little off $AMRN which surprisingly held very well on both Wednesday and Thursday.  In fact, I added more $AMRN on Thursday to make it my largest position in my port expecting it to climb back to $3.1x area. But then, an unusual phenomenon happened on Friday morning that spooked me silly that I had to liquidate my position pronto.

What happen?

$AMRN price was actually doing great on the get go after market opened Friday morning, price steadily climbed to $3.05 and meandering there b/w $3.02 and $3.05. I thought I was sitting pretty on a nice piece of gain with my large position (remember, large relative to my portfolio only).  Then suddenly, BANG!  In front of my eyes as I happened to glance my eyes over to the $AMRN live data stream, 100,000 block flashed before my eyes along with many smaller size blocks and price was printing $3.0 and still heading lower. It was a high volume sell-off within minute.

What’s the H*LL?

Now, there is a lesson I paid dearly for in the past which I’ve no intention to pay for again. It is that in a fast price action that goes against my position, I DO NOT want to wait around to find out what’s going on before taking action, I’ve to take action IMMEDIATELY to save my hide BEFORE finding out what has happened.  Thus, without hesitation, I joined the selling crowd and dumped my position as fast as I could get the order in.  Luckily, price did not do a free fall and I was able to get out at $2.98 average.  I sold 80% of my position first and then later on, I decided to sell the rest.

Guess what, I still do not know what caused the huge dumping.  I could come up with theory of manipulation but the problem I’ve with large dumping is that whoever did it decided it was unfavorable to hold his/her large position.  And this action could trigger other large holders to feel the same.  Almost a million shares traded in an hour after the initial 100,000 block flashed before my eyes.  $AMRN did not bounced back to $3 and closed at $2.96.  Despite my belief that Amarin’s Reduce-it trial may be a success, I’m going to wait to see if price can recover before jumping back in.  So for now, I’ve no position on $AMRN.  In essence, I do not want to fade a large dumping regardless of what reason that triggered it, especially when the SP500 was going up.

Meanwhile, I’m still very bullish on $HIMX.  Despite SP500 gap-down on Wednesday, I was surprised to see $HIMX opened at $6.71 (a mere $0.08 below previous day close).  I immediately sold 2/3 of my position ’cause I knew the falling SP500 would continue to drag most stocks down.  Once price settled down at $6.54, I began to buy back what I sold to lower my average cost.  Although Thursday was a down day for Himax, I no longer saw the need to do what I did on Wednesday ’cause the SP500 was bouncing.  I expected it to be a small range day with low volume so I stayed put.  In fact, I added some more.  And when the bounce began to kick off on Friday, I added even more. $HIMX is now my largest position in my port.

Sidebar: when I’m bullish in a stock based on my belief in the fundamental story, I will manage it to achieve lower average cost in a falling SP500.  I learned that it is easier for my port and my mental state if I manage a portion of my position then to just sit and witness the drawdown.  I did the same with $CARA when it trended down after the secondary offering.  The sell and buy back definitely helped my mental state during the ordeal.

HIMX_daily

From the daily chart above, the downtrend since the earnings update finally ended on Thursday (with decreasing volume) and bounced on Friday.  Notice the momentum indicator below (the first one with the yellow trendline) reflected a technical divergence where the momentum indicator is heading up while the price was heading down.  Technically speaking, the direction of the momentum indicators foretell the possibility of the price trend to follow the same direction of the momentum indicator.  What the divergence will not tell us is when.  So I just have to wait for price action to confirm the divergence theory and I believe Friday bounce is the possible confirmation of a reversal in trend.

HIMX_weekly

The weekly chart above reflected a spinning top green bar. To me, a spinning top next to support (Fib 61.8% retracement) has a high probability of a bounce and trend reversal.

Fundamentally speaking, what more can I say about 3D sensor from Himax?  I chose to believe in CEO’s proclamation that “3D scanning solutions will bring us the explosive revenue growth when the new feature gets adopted by smartphones.”  Notice that he said “when” not “if”.  The “when” has already been indicated by the following articles below which triggered the uptrend in March to $9+.

  1. Himax: 3D Sensing Supplier To Apple’s iPhone 8?
  2. iPhone 8’s augmented reality 3D sensor could be built by Himax Technologies
  3. Himax reportedly joining 3D sensor supply chain for ‘iPhone 8’

Below, I copy/pasted an excerpt from the first article above: “Himax: 3D Sensing Supplier To Apple’s iPhone 8?” which I considered is a very convincing evidence that Himax will sell more of its 3D sensor than competitors for the future smartphones:

HIMX_3D sensor

Basically, I agreed wholeheartedly with Charlie Chan from Morgan Stanley.

Giving what I believe in, I was very thrilled to see doubters and skeptical short-sellers taking $HIMX back down to below $7.  And I thought I missed the boat.  As far as I’m concerned, the above articles regarding iPhone 8 merely represented a small portion of the total smartphone business.  Do you really think iPhone 8 is the only smartphone that is going to carry the 3D sensor?  Unlike the expensive OLED screen and iPhone, the odd of most (if not all) future smartphones carrying a 3D sensor is much higher than smartphones using OLED screen.  The fact that “Himax’s wafer level optics (WLO) technology can further reduce the size and fit the 3D sensing in smartphones” tells me that the probability of Himax’s 3D sensors appearing in majority of future smartphones is very high. Now, I can begin to understand why Himax’s CEO made the following statement in the recent earnings call:

Judging by the ongoing close collaboration and discussion with multiple leading end-device makers, we have strong reasons to believe that the 3D scanning solutions will bring us the explosive revenue growth when the new feature gets adopted by smartphones.

I get it now.

Despite a weak market on $IBIO, I’m not worried at all.  With their plant-based protein expression production facility in cGMP full compliance according to their latest shareholders update, I believe events will fall into place soon enough.  As far as I’m concerned, $IBIO is only one news away from spiking higher.

Fibrosis treatment, if successful, will turn this tiny company into a powerhouse in no time at all.  What I like about the coming Phase I trial (when approved by FDA to begin) is the possibility of being able to test the fibrosis treatment discovered by Dr. Carol A. Feghali-Bostwick on patients directly rather than on healthy human for safety testing.  What that mean is that Phase I trial will have immediate result on IBIO-CFB03 efficacy.  And a successful trial will allow dying patients to use the “right to try” law to extend their life.  That is why I think the filing of NDA is critical news.  To know more about Dr. Carol A. Feghali-Bostwick’s discovery, watch the video:

Due to minor drawdown from $AMRN and $IBIO, my port gave back a bit for the week.

Current positions:

Main port (no margin): HIMX  IBIO  and (% of cash withheld in order not to give away by allocation size) cash. (up 1.1% YTD)

Trading port (with margin): MENXF IBIO HIMX

My 2 cents

From my camera:

022



Categories: Daily trading Journal, trading journal

Tags: , ,

2 replies

  1. Couldn’t agree more about your comments on HIMX, nice job!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: