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

“You’re running too fast!”

The warning was too late

A loud crash heard and bruised knees/palms visible

“Ouch!”

And that how the market ended the week.  More so on the Nasdaq than the SP500.  If we were to look at the SP500 alone, it was actually quite a tame week.

SP-500_weekly

From the weekly chart above, the SP500 looked quite normal with a non-threatening spinning top bar. On the other hand, from the Nasdaq front, the weekly red solid bar (see below chart) looked quite heavy-handed.

Nasdaq_weekly

What do people normally do after they fell down.  I think it’s a safe bet that most of us will simply get back up and continue onward.  So, what is the odd that the market will do the same next week?  Come to think of it, where else can we put our money when inflation will eat us alive if we leave the money in the bank?  Equity appreciation is now the main feeding line that keeps the economy running until real economic growth kicked in with higher pay and low unemployment.  That is my common sense understanding of our current economic predicament.  But to keep the equity appreciation going for as long as it can, it must rise in a steady pace instead of burning itself out in a quick sprint.   Thus, it’s my two cents that Friday Nasdaq free-fall drop is the market circuit breaker telling us to “slow down.”

I believe we are at at the cusp of shifting to the next technological paradigm where 3D scanning, VR, AR/mixed reality will become the norm instead of a simple fad.  Both retail and entertainment sectors will embrace these technological changes because it enhances and titillates our human senses.  Almost everything we do as human is to feel alive. And what better way to feel alive than when we bombarded our five senses?

The coming AR/VR revolution will take three of our five senses (sight, hearing, and touch) to the next level such that it will be impossible for us to live without the AR/VR gadgets the way most of us can’t live without our smartphones. Social networking is no longer restricted to sending text messages with smartphones; it will include an immersing experience inside a VR/AR goggle.  The VR/AR world will open the door to a new level of social interaction/networking in a VR environment of our own imagination. Want to meet your friends after work in a cafe in Paris? No problem. Want to meet in the world of Pandora’s biosphere (from the movie Avatar)? No problem.  There will be commercial interests who will make sure you’re able to travel to any part of the real or fantasy world inside the VR universe.

3D scanning allows us to put ourselves inside the VR/AR world where our digital avatar will interact with others’ avatar.  You’re going to see your friends as if you’re looking at them face-to-face. In the retail industry, 3D scanning allows us to present an object to the VR retail world where online retailers can quickly find a match for what you’re looking.  This is the future I’m seeing.

Although this future is still a bit further away, it must begin somewhere. Guess what, I believe we are right in the middle of the gestation of this new AR/VR revolution.  And what better time to buy the stock of the companies that are heavily involved in this new technological paradigm shift?

Surely I’m not the only one seeing this possible future. Recent Google I/O 2017 and Apple WWDC 2017 events sparked so much excitement that the tech rally went full throttle which caused Friday Nasdaq circuit breaker to kick in.  I don’t think Friday drop is going to kill the tech rally in light of where we are heading in the future.

Obviously, my choice of speculation in this new paradigm shift is Himax ($HIMX).  I chose Himax because it is conceivable based on information from the recent earnings call that the company holds a major technological moat on WLO in 3D scanning.

Why am I so focused only on Himax’s WLO 3D scanning tech when they’ve other great techs such as LCOS, TDDI, and always on/low energy tech?  That is because the new iPhone 8 is going to kick off the AR phenomenon with 3D scanning and the WLO tech is the known tech that is thin enough to fit inside the ever slim smartphones.  And Himax already have a 3D scanning total solution in WLO that can fit inside all future smartphones from all brands.

Here is an excerpt from an article I borrowed to further provide support that Himax may be the only company with a major head start in the field of AR that involved 3D scanning.

January 04, 2016 05:00 ET | Source: Himax Technologies, Inc.
TAINAN, Taiwan, Jan. 04, 2016 (GLOBE NEWSWIRE) — Himax Technologies, Inc. (Nasdaq:HIMX) (“Himax” or “Company”), a leading supplier and fabless manufacturer of display drivers and other semiconductor products, today announced its Wafer Level Optics (“WLO”) laser diode collimator with integrated Diffractive Optical Element (“DOE”) has been integrated into laser projectors for next-generation applications. Himax has significantly reduced the size of laser projectors, enabling the integration of technologies, such as active 3D scanners, into mobile devices, automobiles, augmented and virtual reality devices, and IoT applications.

Himax’s WLO creates a unique hybrid optical system to combine the collimator and the DOE into a height profile of less than two millimeters. Himax’s component is then stacked on top of a laser diode to reduce the overall height of a coded laser projector assembly to five millimeters. The WLO laser collimator provides high alignment accuracy and both the collimator and DOE can achieve system and algorithm customization.

Source: Himax Announces Wafer Level Optics Laser Collimator and DOE for Laser Projectors Used in Next-Gen Applications

Here’s another one:

Planning for future augmented reality production
On the first-quarter 2016 earnings call, Himax CEO Jordan Wu said its augmented reality (AR) technologies are “just the beginning of a long-term growth story for the company, and there are plenty of reasons why he should be optimistic.

The company’s been working on AR-related tech for about 15 years, already works with 30 AR customers, and made some gains in the space this year.

***

Research firm IDC expects the combined AR and VR market to grow by more than 180% between now and 2020, to $162 billion. All of this pent-up potential could begin to materialize for Himax in the coming year, as the company expands its AR capabilities.

Himax plans on finishing a new production line for its liquid crystals on silicon (LCOS) and wafer-level optics (WLO) AR technologies by late 2017 or early 2018. Wu says this will “enable higher-end product design and offer far better product quality for mass production of our next-generation LCOS and WLO product lines.”

Source:2 Things Investors Can Expect From Himax Technologies in 2017

Therefore, unless someone can tell me there are other competitors who have mass production capabilities to produce WLO 3D sensors that can fit inside a slim smartphones, Himax looks like a winner in light of iPhone 8 debut of 3D scanning.  Btw, that is just the beginning ’cause Himax is also a major player in the future world of advanced VR/AR goggles.

As I mentioned last week that 3D scanning will also appear in electronic products other than smartphones and AR/VR goggles, I also realized that 3D scanning may also appear in electronic devices that normally do not carry the inferior 2D optical sensor.  Since 3D scanning can recognize specific movements such as hand gesture & body movements, it may be incorporated into electronic devices as a way to control them.  Imagine your alarm clock blasted you awake and you needed three more minutes of snooze time, showed your three fingers in mid-air and you got your three minutes snooze. Gone are the day fumbling for the alarm clock to hit the snooze button with a fixed snooze time that might be too long.  And this is just a simple example.

In a nutshell, it is my 2 cents that Himax massive potential sales revenues in the coming futures will come from selling their WLO 3D sensor to the three major areas:

  1. 3D scanning in smartphones,
  2. VR/AR goggles
  3. Electronic devices for all kind of applications outside the above two categories (including the ones that normally do not carry inferior 2D optical sensors)

And I haven’t even addressed revenues streams from LCOS, TDDI, and always on/low energy categories yet.

Friday Nasdaq drop made me realized something. It is a waste of time to try to trade $HIMX even if my attempt was to sell high and buy back low to lock in some gain in light of a broad market sell-off in Nasdaq. The risk of chasing a fast bounce is not worth it.  It may even cost me money and higher re-entry price.  My attempt on Friday did not net me any benefit so it was a waste of time. I already got in under $7 so I should be happy with that.  Any dip in price should be considered a gift for those thinking of buying or adding.

As we approach the launch date of iPhone 8, the more riskier it is to trade $HIMX in term of missing the boat.  How much more volatility we expect to see in $HIMX will depend on how many people are looking to buy Himax on a dip.  As more people realize the futility of trading $HIMX when their intention is to hold, volatility may decrease and price may climb steadily upward.  Although I value broad market action more than specific company fundamental, I may be changing this value when it comes to Himax due to its massive potential in the beginning of the new technological revolution in AR/VR/3D scanning world.

Chartwise, $HIMX gained another respectable 4.36% for the week.

HIMX_weekly

Although facing resistance from the 79 MA and the Fib 61.8% retracement from recent downtrend, I expect the next drive will pierce through these two resistances like hot knife through butter.

Because of the Nasdaq free-fall, I also reduced position size on $AMRN.  However, I still hold a decent size so I’m not too worried about missing the boat here.  At this point, $AMRN is all about waiting for news/rumor of buy-out or a slow gradual rally in anticipation of good news from the interim data review of its Reduce-it trial in Aug/Sep period.  Thus, I’ve plenty of time to buy back what I sold on Friday.

AMRN_weekly

The weekly chart above reflected a red bar as price approached the converging point of the symmetrical triangle.  If broad market recovers next week instead of continuing with its downward movement, price can easily bounce back higher.  However, there is also the possibility that price will just meandering around $3 and remain flat for a week or more until news or rumor sparks a rally.

I sold half of my $CARA position when price started tumbling down on Friday.  Pretty much I gave back much of the gain made in the week.

CARA_weeklyAlthough the weekly chart reflected a red bar, it’s still a bar with a higher high and a higher low. Price is still above the 5 and 15 MA and within the uptrend channel.  $CARA, being a highly volatile stock, can easily bounce right back above $18 when the broad market pick itself up again to move higher.

$IBIO received volume buy this week that spiked price up to $0.45 for a day.

IBIO_weekly

Although the volume bar is a tall red bar, the volume mostly came from the buy on Monday.

As far as I’m concerned, IBIO is all about the fibrosis treatment discovered by Dr. Carol A. Feghali-Bostwick.  The coming catalyst is the filing of IND for IBIO-CFB03 to kick off the Phase1&2 combo human trial that allows IBIO to test on fibrosis patients directly.  I see positive sign of the IND being filed on time due to recent shareholders update.  Below is an excerpt:

IBIO_IND

Source: iBio, Inc. Provides Corporate Update at Annual Shareholders Meeting

Obviously, I expect price to bounce furiously once the filing of IND is announced because it is telling the biotech world that IBIO-CFB03 is real.  That it has proven to work on human skin so far. This provide a far better odd of success than when it proved to work only on mice.

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 $HIMX (my largest position), my port was able to gain slightly despite drawdown from $CARA, $AMRN, and $IBIO.

Current positions:

Main port (no margin): HIMX  IBIO  AMRN  CARA  (up 8.9% YTD)

Trading port (with margin): MENXF IBIO

My 2 cents

From my camera:

043



Categories: Daily trading Journal, trading journal

Tags: , , , ,

2 replies

  1. Following your DD I took a small position on HIMX @ 7.80 and am up exactly 10% @ 8.20 close in days.
    Thanks, it sounds as exciting as you seem excited.
    Wheres the info re Iphone 8?

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