Weekly thought on $AMRN, $HIMX, $IBIO

This week is the week when the market holds you by your lapel and shakes you around like it is ready to punch you in the gut. And thanks goodness the punch did not come.

SP-500_weekly

The weekly bar ended with a spinning top red bar which is much better than a long solid red bar if the punch had come.  But because of the technical divergence in the momentum indicator below, I experienced an infrequent panic moment that led me to start taking profit.

Early Friday, I really thought that the market was going to continue the free fall from the day before.  So I panicked out and took profit on both $AMRN and $HIMX by reducing my position size from over-weighted to standard size.  Then I waited… and waited… and price did not go down but began to bounce.  Having realized that I was wrong about being panicky, I immediately started to buy back shares of $AMRN and $HIMX   Then I reminded myself of the growth stories that have yet to be unfolded on all my three positions in my port.

$AMRN finally broke $4 resistance and closed above $4 to close the week!  Bravo!  I bet there are many people literally jumping up and down with joy about this rare event of seeing $4 since October 2013.  That is almost four years ago since $AMRN touched on $4!

At first, I thought the failure to closed above $4 on Thursday signified a temporary top when the market crashed; but the market did not crash and $4 was held into the close on Friday which is very bullish in light of Friday being a popular “sell $AMRN down” day.

AMRN_weekly

From the weekly chart above, look at the healthy long stretch of a green solid bar that breakout of the multi-years Cup and Handle pattern.  Look at the higher than average volume with both the momentum indicators below STILL at the lower end of the range.  The way I see it, in order to confirm this multi-years Cup & Handle breakout, we need a few more weekly green bars to confirm it.  Otherwise, a red bar that fall back into the handle will disqualify the breakout bar.  But giving the momentum and strength of this week bar, I expect to see higher prices to come to eventually confirm this multi-years C&H breakout.  Also, from my observation, the longer it takes to form a cup & handle pattern, the longer the trend will move in the direction of the break out.

Fundamentally speaking, there isn’t much for me to add except to say that an early stop of the coming Reduce-It trial due to positive interim data review will rocket price to the clear blue sky pretty quickly.  Afterward, I’m betting on a bidding wars from BPs to own the Vascepa magical pill which will then take price to the upper stratosphere.  That is the bet I’m playing.   Come to think of it, it was totally careless of me to sell $AMRN for profit early Friday.  But once I realized my mistake, I bought most shares back immediately.  I will buy the rest back next week when cash is free up from the three days settlement hold.

$HIMX remained neutral with another doji bar this week.

HIMX_weekly

Price is now trading between the 79 & 89 MA resistances which may soon become supports.

Whatever needed to be said about Himax I’d already done in the last three to four weekly posts. So, let me just summarize what CEO Wu has been trying to tell us in the recent Q1 2017 earnings call by copy/pasted CEO Wu’s words below:

Alternatively, for selected customers we can also provide individual key components upon their requests. 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.

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.

When iPhone 8 comes out with 3D sensing and scanning, I think it is pretty safe to say that the “new feature (3D scanning)” will get adopted by smartphones.  Thus, logically speaking, we should expect to hear some guidance regarding the “explosive revenue growth” from CEO Wu in the coming earnings call.

So, they have plenty of idle capacity sitting there and all get excited about the potential for 3D scanning. So there are actually a lot of people we can work with. And then, a very key component you see optics are typically in the form of DOE, a diffracted optical element and certain lenses. And that we are capable designing DOE upon customers’ request.

Notice the phrase “a very key component” in the form of DOE, a diffracted optical element and certain lenses.  Did anybody know that Himax is an expert on DOE? I just found out myself when I read that sentence carefully. Does that means those phone makers who are not using HImax’s 3D total solutions will still need to get Himax’s DOE component?  If yes, then expect to see Himax’s footprint in practically most next generation smartphones.

Here’s a list Himax’s competitive strengths that quickly comes to my mind:

  1. 3D sensing and scanning total solution (WLO for tiniest size to fit on smartphones)
  2. LCOS
  3. TDDI
  4. DOE

Once AR takes off, demand for Himax’s components will become unstoppable is my 2 cents.

Again, I was careless to even trade $HIMX for profit early Friday.  But I paid for my mistake with higher re-entry prices.  Oh well, this is the price I’ve to pay when I get spooked by the market from time to time.

$IBIO did a great job holding the ground.  Another solid green bar to lend support to the bottoming process.

IBIO_weekly

Notice that the momentum indicators are both turning up as well.  Perhaps, we can hear some good news soon regarding the filing of IND application for their IBIO-CFB03 drug to kick off the Phase 1&2 combo trial that allows it to test on patients afflicted with the deadly fibrosis diseases.

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

Thanks to $AMRN 19.94% up move this week and a slight uptick on $IBIO,  my port gained nicely for the week once again.

One side note regarding $CARA. Although I didn’t own it this week, Thursday after hour data release on its Phase 2b OA trial for hip and knee pain disappointed and price dropped 39.67% on Friday which literally eliminated the gains of the last two weeks plus some.  I was fortunate to forsake $CARA for $AMRN in hindsight.  The lesson on $CARA price action is that the market is never your friend, it’s an impersonal mechanical bull you ride on for as long as you can without being thrown off with injury. Preferably, we get to choose to get off the bull on our own before being thrown off like a ragtag doll.  That was my original intention for my action in taking profits on both $AMRN & $HIMX.  But the “when” to get off the bull is a personal challenge we all have to tackle.  It’s really a hit & miss proposition.

Current positions:

Main port (no margin): HIMX  AMRN  IBIO  (up 18.8% YTD)

Trading port (with margin): MENXF IBIO HIMX

My 2 cents

And Happy July 4th weekend!

From my camera:

Sunday Home Depot 006



Categories: Daily trading Journal, trading journal

Tags: , , ,

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