Weekly thought on $CERS, $IBIO, $SEED

Up, up, and away!

And so the market proved me wrong once again since I predicted high probability of a down week. Being wrong is very common for me when it comes to making prediction regarding the broad market; especially when I’m trying to predict market top in its ninth year of bullish trend.  I figured that after nine years of non-stop rally, the odd of major correction should be near.  Well, based on action this week, it’s not happening yet. But don’t get me wrong, although I’m “anticipating” a market correction, I don’t have a preference of which way the market is heading.  It can continue higher for all I care. It doesn’t matter to me. I just want to know which way it is going so I can bet accordingly.  I’m all for flowing with the market as long as I get a sense of where it’s going and my mentality can sync with the flow.

Fortunately, I was able to sync nicely with the flow of $HIMX this week. Despite my expectation of a falling market, Himax opened Wednesday with news that “Qualcomm and Himax Technologies Jointly Announce High Resolution 3D Depth Sensing Solution.” With such news, I’d to literally ignore the broad market action and just buy the stock. I bought some after the open and added more when it dipped during the morning intraday action.  Gone were the opportunity to buy below $8 which was what I was waiting for ever since I transferred my account.  I was expecting a huge market correction that I even gave up the chance to buy $HIMX at low $8.  But with the Qualcomm news, I would kick myself silly if I didn’t buy immediately.

Taking a bite out of the market doesn’t mean I’ve to buy the bottom of the valley and sell at the top of the hill.  Although it would be nice to do so, it’s impracticable because no one is that prescient.  So I loaded up $HIMX a little under $9 looking for a ride up. Lo and behold, fortune blessed on me and I was in the money for the next two following days.  On Friday, despite my mind telling me to hold Himax for long haul, I simply could not resist the urge to sell for profit when price started to weaken from the morning intraday high of 10.47. I placed a mental stop and it was triggered when price made a quick dip.  I was already out before price got to $10.24.

Why did I have the urge to sell?

I think it was the past heart-breaks that gave me the motivation to take profit.  I still remember the days I rode my huge profit on $DMRC and $LRAD back down to breakeven based on my misguided unrealistic expectation that price would just continue higher unabated because the fundamental was so fantastic from my narrow vision. No more, I wanted my profit and I took them; even at the risk of leaving money on the table.  I tell ya, it wasn’t a good feeling to see price bounced back as high as $10.64 without me on board.  But that is the way the ball rolls. We only receive what we deserved the moment we took profit.  Sure, if I’m willing to risk my unrealized profit by holding on for longer period, then I may receive reward for taking the risk of giving back gain. Nothing go up unabated and there will always be profit-taking at some points and short-sellers will also find a point where they are brave enough to short the hell out of the stock. At what point the price begins to zag in the zigzag movement is the challenge for swing traders to tackle.

What I just discussed above is essentially the main objective of swinging trades. Similar to daytrading, swing trade involved catching the momentum of the trade and getting out before the expected correction except that the time frame is based on more than a day to possible weeks.  It took me awhile to realize that swing trade is the cousin of buy and hold as long as you stay true to the family.

What do you mean?

What is the point of buy and hold?  The only reason you want to buy and hold is because you believe the fundamental story of the stock is so compelling that you have to own it no matter what.  You want to ride the “expected” upward trend due to anticipated growth in the business of the companies you invested and believed in.  Along the way, there will be obstacles such as appearance of new competition, disappointed sales/earnings because it didn’t meet “whisper numbers”, technological glitches, supply issue, etc that will affect the upward trend.  Of course, in due time these setbacks are remedied and price continues upward.  Unless you are young and full of life goals that have nothing do with watching the stock market, buy and hold will be the ideal situation. Imagined a young man in his twenties who bought $AAPL after the IPO in December 1980 and forgot all about it until he reached ripe old age, lo and behold, he is financially secured despite the fact that along the way Apple Computer almost went under before Steve Jobs came back from exile to revive the company into the most successful company in the world.

Since we are watching the market actively, then it is our duty to swing trade and attempt to take profit on the stock we believe in along the way.  The only difference between a regular swing trader who seek opportunities by scanning thousand of stocks looking for specific pattern and my style of swing trade is that I stick to the stocks that I’ve done my due diligence and believe in.  This is what I mean by staying true to the family.  I’ve a family of stocks which I believe has bright future. Those who read my blog will notice that there are only a few stocks I focus on.  Recently they are mainly $HIMX, $CARA, $AMRN, $IBIO, $SEED, $PI and now $CERS again. By maintaining my interest in swing-trading these stocks, I’m in fact attempting to stay long term with them. Notice the operative word “attempting.”  I’ve missed quite a few good ones ’cause my attempts failed; but my goal is not to marry any one of my favorite stocks.  My goal is to swing-trade the ones I am lucky to catch on in the upswing with the overall objective of increasing my total gain in my portfolio.  In other words, it doesn’t matter if I missed $OLED if I caught $AMRN on the upswing.  The end result is the same as long as my portfolio amount increased.

The last few years had been my wake up call regarding buy and hold. As mentioned above, after a few major “gave back” from holding onto unrealized gain far too long, it dawned on me that there will “always” be selling from profit-takers and short-sellers.  It’s the fact of life so I might as well be part of the profit-taking since I’m watching the market daily.

I prefer to buy my favorite stocks after they were beaten down. I bought $CARA in 2016 when price dropped below $6 ’cause I believed it was too early to call it a failure. I traded it in the $20ish in 2015 until I realized the price could not hold; therefore, I exited and left it alone until 2016 when price dropped to below $6.  I did the same with $GWPH when price dropped to the $40ish from over $100.  Since I made good money on both buys, it is now a part of my trading repertoire to buy downtrodden stocks that are still in my “to buy” watchlist.

Having said the above, I’m seeing the same play here regarding $CERS.  $CERS fell from grace months ago when the company encountered supply disruption. Although price corrected severely, I still believe in its fundamental story. I think the selling was done and the focus is coming back to the red blood cells trial result that has the potential to take price back to above $4 and beyond. INTERCEPT Blood System for red blood cells to inactivate blood-borne pathogens in red blood cells has a much bigger market potential in term of sales compared to the already approved platelet and plasma market. This is what I’m betting on and why I bought some on Friday when price bounced strongly that took out the highs of past nine trading days.  Strong bounce in high volume means the possibility that other traders and investors are playing the red blood cells trial result.

CERS_weeklyThe weekly chart looks good for another possible run up from the low since mid-May.  I like the fact that the 5 MA has now passed thru the 15 MA to the upside in high volume.  My 2 cents is that a successful Red Blood cells pathogens inactivation has the potential to take the stock price over $10.  That is my bet.

Look like $SEED has waken again after a brief lull.

seed_daily

Friday bounce looks very promising for a continuation of next stair step rally.  Price is bouncing off the daily 89 XMA as well as the bottom band of the Andrew Pitch Fork pattern.  These are bullish signs per my book.  My 2 cents is that the next stop will be at the low $2.00

Fundamentally speaking, any news of China opening the door earlier for GMO seeds has the potential to turn this stock into a wonder.  Think about this, their money issue has been dealt with from the partial collection of the $60 millions from sale of their distribution business. They have an equity line in place.  $SEED is ready for action.  And the company is ahead in having their own pipeline of GMO seeds submitted for China approval.  I’m glad I got back in.

$IBIO has another sleepy week.  But I’m sensing some movement.  A quiet undercurrent of buying as if someone wanted to accumulate quietly.  That’s fine by me.  I think anyone buying here has the potential to buy at the very bottom.  There is nothing more for me to say but simply wait it out.

Below is a copy/pasted of my previous post of why I bought the stock.

The major reason why I like iBIO is IBIO-CFB03 discovered by Dr. Carol A. Feghali-Bostwick to treat fibrosis disease.

  1. I trust Dr. Carol A. Feghali-Bostwick’s discovery (watch video from link here: http://www.sclerodermavideo.com/mobile/vidsmobi1.htm)
  2. IBIO-CFB03 worked on human skin. Thus, the probability of success is far superior than pre-clinical tests that worked on mice only.
  3. Discussion with FDA led to the possibility of conducting a combo Phase I and II trials together that will allow IBIO to test IBIO-CFB03 on patients afflicted with the deadly fibrosis diseases. So the result of its efficacy will be known after the first trial.
  4. The beauty of the success in IBIO-CFB03 is that the “right to try” law will allow dying patients afflicted with the deadly fibrosis diseases to immediately start the treatment as soon as the drug is available in mass production.
  5. IBIO plant-based technologies allows IBIO-CFB03 to be produced cheaply and economically so that insurance should not have issue paying for the treatment
  6. The only downside is the time it takes for IBIO to file the IND application to kick off the Phase I & II combo trial. Obviously, the long period of waiting has unnerved quite a few investors.

Btw, I almost forgot to mention that I also swing-traded $AMRN this week with gain.  I sold it the same day I sold $HIMX.

Due to positive movement from $SEED and swing trade gains from $HIMX, $AMRN, my port gained a few percentages point this week.  Yay!

Current positions:

Main port: SEED  CERS   IBIO  & cash (up 32.1% YTD)

Trading port: MENXF IBIO

My 2 cents

From my camera:

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Categories: Daily trading Journal, trading journal, Trading philosophies and thoughts

Tags: , , ,

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