Weekly thought on $AMRN, $CARA, $HIMX, $IBIO

Up up and away!

SP-500_weekly

What more can I say about the SP500 weekly chart above?

Fortunately, my port is able to bounce as well.

I did make one change in mid-week though. I replaced $BIOC with $CARA.  Although I still believe in $BIOC potential, I couldn’t help jumping back into $CARA when I saw price bouncing off the $16 after dropping below it for a quick dip.  I took a break from $CARA in mid-May when price bounced back above $17 after spending most of April riding the drawdown.  Although I got out without giving back much of earlier gain made from last year, it was not a fun ride at all.  But Wednesday price action piqued me to get back in. $BIOC was struggling with $1.50 and I was expecting it to be over $1.50 by then.  Thus, I made the decision to unload $BIOC at breakeven and bought some $CARA instead.  I added more $CARA the next day when price took out $17 resistance.  Basically, I got back my core position of $CARA.

CARA_weekly

By looking at the weekly chart above, I could sense the wave of an uptrend with the next wave being up.  The telltale sign for the up wave is the giant bullish engulfment candelstick bar four weeks ago. After a month of down wave, it’s high time for the up wave to begin!

Fundamentally speaking, what more can I say about CR845 that can reduce severe pain without the side effect of opioid drug such as deadly addiction?  The world will welcome this drug with an open arms if it works.  So far, multiple prior phase 2s show positive results and the data are encouraging.  The recent Part A of Phase 2/3 result of the pruritus trial is also a success.  Now, we are waiting for the following trial results by end of June.

  1. A phase 3 trial of 450 patients for IV CR845 for post-operative pain
  2. A phase 2 trial of an oral formulation for arthritic pain

If we hear good results from these trials b/w now and end of month, the next wave up is going to be huge.  Thus, I’m glad to be back in $CARA holding a core position size.

The big event of the week is the rumbling noise generated by the rocket engine of HIMX.  On Thursday, price blasted off to the upside and never looked back for the first 3 hours. It then settled down a bit without giving back too much. What most interesting is that price did not give back any gain at all the following day like it used to do for the last four weeks; instead price closed higher on Friday.  The dynamic has changed!

HIMX_weekly

Take a look at that solid green bar that outshines the previous five weekly bars!  When price cut through 79 & 89 ma resistance above (blue and red dash lines), it will be smooth sailing to the upside from there on.

Fundamentally speaking… as we all know, the stock market is a forward looking entity and there is only so much the doubters and short-sellers can do to keep price down by harping on poor numbers based on Q1 & Q2 lower guidance.  In fact, I’ve to thank them for allowing me to accumulate a stake under $7.  As a layman in technology, I’m guided by my common sense and logical deductions which helped shaped my beliefs.  Whether I’m right or wrong in my beliefs is another story as long as it helps me make a decision to assume the risk of holding a position.  There is no guarantee in this world but there are opportunities if you understand the risk.  Understanding risk, to me, is no different than understanding probability.  I received my first hand lesson on risk and probability from my early days in learning how to count cards playing BlackJack.  As in counting cards, I use well-known chart patterns and technical indicators to help me get an edge in the stock market game.  On top of that, I also combine my personal understanding of the fundamental story of the stock to further enhance my edge.  While still not a guarantee, my understanding of the technical and fundamental story of the stock provides the probability of success I needed in order to swing for the fences in my speculation.  Right or wrong, it’s my own risk assessment.

And here is my understanding of the future in 3D scanning.  It is happening and it’s coming in a big wave.  Not only will iPhone 8 comes with 3D sensors, most future smartphones from other major brands such as Samsung are going to have 3D sensors as well.  And where can these major brands get the 3D sensor total solution that can fit into their smartphones quickly and efficiently?

Himax!

Himax’s 3D WLO sensor is thin enough to fit the job perfectly!  Who else has 3D sensor in WLO that is thin enough to fit inside the slim smartphones?  If there is no one else, then I’ll be expecting to see Himax’s 3D sensor in most smartphones the same way everyone expected to see an Intel CPU in most PC computers.

But the story is not over yet.

Imagine that all future electronic eyes will have 3D sensor as well.  Human eyes see everything in 3 dimensions.  Nature does not create human eyes to see 3 dimensions for no reason.  The depth dimension enables human brain to calculate and respond to outside physical world without bumping into them.  This is the correct way to see thing.  Until now, electronic eyes have to live with inferior sight of 2 dimensions.  Thus, their utility is limited to “I see you” type of respond.  Now with the ability to scan the environment in 3 dimensions, the utility allows more functionality to build into the electronic devices with optical sensor.  And here is the kicker, Himax’s recent earnings call specifically mentioned the following:

Apart from smartphone and tablets, we expect the adoption of 3D scanning to widely spread over to various applications such as industrial, IoT, AI, medical, automotive, military, surveillance and drone. We will expand the technology roadmap to cover more applications in due course.

Now, take a moment to digest this information.  Next, imagine, in the near future, the possibility of seeing Himax’s 3D sensor in most electronic devices that have electronic eyes.  There is always an advantage in making chip smaller (like 3D sensor in WLO) not just for smartphone, but for all electronic devices. My opinion is that Himax has created two giant moats in their 3D sensor technology- WLO technology that allows reduced size and a head start in mass production based on their CapEx investment.  These two giant moats have the potential to give Himax a major head start in maintaining absolute technology leadership in 3D scanning for years to come!

Come to think of it, missing the $PI trade on the long side really taught me to hold steady my $HIMX position. I no longer feel the need or urge to take quick profit.  I no longer fear the down wave that is a natural part of swinging up waves.  This may be the easiest buy and hold when Himax proves that they are indeed holding an absolute technology leadership position on 3D scanning.

$AMRN is also an investment I believe has better than 50/50 probability of success. There was a previous Japanese Jelis trial that may support the success of the current Amarn’s Reduce-it trial.  The issue with the Japanese Jelis trial was that it tested the effects of long-term use of EPA 1800 mg/day in addition to a statin in Japanese patients.   The Reduce-it trial included patients in many different countries. Per Amarin, “This study is being conducted at over 400 clinical sites in 11 countries with the largest number of sites located within the United States.”

With the second interim data review that are coming in August/September of this year, I expect to see price to start a rally based on probability of an earlier stop due to efficacy.  While the odd of earlier stop is unknown, the possibility is still there.   There is another fundamental factor that I believe will enhance the risk/reward factor which is already astounding on its own based on Amarin’s indication.  It’s the massive and growing aging population (65+).  Below is a copy/pasted from the article, “World’s older population grows dramatically” dated March 28, 2016.

The world’s older population continues to grow at an unprecedented rate. Today, 8.5 percent of people worldwide (617 million) are aged 65 and over. According to a new report, “An Aging World: 2015 (link is external),” this percentage is projected to jump to nearly 17 percent of the world’s population by 2050 (1.6 billion).

Even a tiny percentage of this 617 million population can propel Amarin’s Vascepa sales into stratosphere in the event of Reduce-it trial success due to aging population choosing Amarin’s Vascepa as a preventative therapy against cardiovascular events.  Of course, this preventive therapy is purely my logical deduction based on the fact that with a successful Reduce-it trial, Amarin is free to use 1st Amendment free speech to advertise its Reduce-it trial result.

At this point with a growing weekly script numbers that are consistently at all-time-high in gaining market shares, I believe BPs are looking at it.  Will they try to bid for the company before Reduce-it trial result to get a good deal or wait until the Reduce-it trial result to pay a much higher price if successful?  No one knows but I’m not going to miss any chance of missing the boat; thus I’m back in and holding.

Technically speaking, $AMRN finally has a positive close on a Friday since mid-April.  The usual pattern of Friday sell-off after weekly script number is finally broken!

AMRN_weekly

The weekly chart reflected a solid green bar for the week inside the symmetrical triangle.  This improve the odd of price heading upward to take out the triangle to the upside.  Also, a green bar after a doji or spinning top bar means the bull is gaining ground.

$IBIO also gained back some ground this week by closing the week with a green bar.

IBIO_weekly

I truly believe the company will come through with their fibrosis trial and it’s a matter of patiently waiting for them to submit the IND application for FDA approval to kick off the combined Phase1&2 trial that will allow them to test directly on patients stricken with fibrosis diseases.  Basically, we will know the efficacy of IBIO-CFB03 (discovered by Dr. Carol A. Feghali-Bostwick) after the first human trial.  If it works, patients dying of their fibrosis diseases in major organs may be able to reverse their dead sentences using “right to try” law before final FDA approval.  A success will transform IBIO into a major pharmaceutical company with its proprietary plant-based protein expression technologies.  Technologies that will allow IBIO to produce the IBIO-CFB03 drug at a fraction of the cost comparing to conventional CHO technology.  This lower cost will open the door for insurance companies to approve IBIO-CFB03 drug for patients.

For more information about Dr. Carol A. Feghali-Bostwick’s discovery, click on the link below and select the first video presented by Dr. Carol A. Feghali-Bostwick.

Go to 41 minute on the video if you want to skip directly to discussion on how IBIO-CFB03 worked on human skin, the significant cost reduction of using plant-based production (this is a very important issue ’cause the significant lower cost opens the door for insurance companies to approve the treatment), and her discussion with FDA.

http://www.sclerodermavideo.com/mobile/vidsmobi1.htm

Due to gains from all of my four positions, my port bounced back nicely for the week.

Current positions:

Main port (no margin): HIMX  AMRN  IBIO  CARA  (up 7.7% YTD)

Trading port (with margin): MENXF IBIO HIMX

My 2 cents

From my camera:

058



Categories: Daily trading Journal, trading journal

Tags: , , , ,

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