Weekly thought on $AEMD, $IBIO, $LRAD, SPXU, TRXC

Before you read on, please be aware that the analysis below is my opinion only and may include flawed assumptions and inaccuracy of logic; therefore, caveat emptor applies here.  Furthermore, all emphasis (color-coded, boldness, and underlined) on the excerpts are my own.

Last week, I talked about the possible double-top formation in the SP500. Let’s take a look at the weekly chart to see where we are now.SP-500_weekly Guess what, this week ended with a doji bar.  As some of you would remember, per my book, a doji bar next to resistance holds a better than 50/50 for a reversal to happen.  In other words, I’m expecting further downward momentum next week on the broad market.  Because of the doji bar, I finished the week holding $SPXU (ProShares UltraPro Short S&P500) looking for a double-bottom (flipside of SP500 double-top).

On Wednesday, “The Fed said it’s hiking rates four times this year, but the market’s not convinced.”  I’m also not convinced the market can handle the two more rate increases after Wednesday 2nd increase for the year. Giving there are two more rate hikes the rest of the year, I gave up on the “anticipated” gold rally and sold my $KGJI on Wednesday.

For the week, I also sold $TZA, $AMRN, and $DFFN.  The broad market opened higher on Monday, so I was stopped out of $TZA for small losses.  I sold $AMRN on Tuesday when price took out the low of Monday doji bar. As mentioned above regarding doji bar at resistance favored a reversal, $AMRN doji bar on Monday was near the $3.50 resistance, so the decision to sell was pretty much automatic when the low of Monday was breached on Tuesday.  Also on Tuesday, $DFFN released news regarding the validation of European Patent for its oral formulation of TSC.  Price spiked up but failed to hold gain within hours.  I was quite baffled by $DFFN inability to keep any price gain.  There seemed to be an invisible force holding this one down.  Instead of fighting this battle, I decided to sell my position at my entry point.

Let put it this way, the stock market is a battle between the bull and the bear.  To really dig in and hold the line, I need to have a full understanding of the fundamental story of the stock.  Unfortunately, I did not have a deep understanding of the science behind $DFFN’s TSC drug to have the kind of conviction to hold the line regardless of price action.  Unlike $IBIO which I genuinely believe its technology has merit in term of saving mankind in a pandemic situation, $DFFN’s science behind TSC’s novel mechanism of action is a mystery to me. The science of developing small-molecule drugs that help regulate the movement of oxygen into tissue is way over my head as a layman; but the allure of possible improvement for treatment for patients with pancreatic cancer; metastatic brain cancer, as well as stroke victims are quite titillating so to speak.  I may revisit when price action begins to show some improvement without headwinds over the price increase.

Getting back to $IBIO.  The company filed form FWP (Free Writing Prospectus) with the SEC on June 13th, 2018.  Inside the FWP was a treasure of progress data investors have been waiting years for.  Despite the positive update from the FWP regarding the expectation of future growth, the looming of secondary offering got quite a few nervous investors to bail and attracted quite a few short-sellers to take the bait.

What bait?.

Hear me out.

With the proposed offering size of $16 million, the company will have the fund to step on the accelerator to speed up on the runway for taking off.  And once it is airborne, this one will just keep on flying higher and higher.  And it is going to dare those who think of selling out for early profit.  In my opinion, plant-based protein expression is going to be the next wave of biotech transformation because we are facing a biological enemy that doesn’t care about our readiness to meet it.  IMHO, global warming (laugh all you want) is speeding up the spreading of the virus of both neutral and deadly varieties. Nature doesn’t distinguish living organism as human or nonhuman.  The battle of single-minded micro-organism against human (the most intelligent and complex biological organism to exist) will surface again and again for years to come.  In light of the threat of deadly micro-organisms that have potential to cause a pandemic attack which could be worse than ever due to our ease of international traveling, plant-based protein expression, IMHO, is mankind’s most effective way to thwart off the attack before it becomes severe pandemic.

Having said the above, it is my 2 cents that the stock price is “insane” to be at this ridiculous price level.  With about 11.6 million outstanding shares and a market cap of $14.14 million at a current closing price of $1.22, it is the steal of the century, IMHO.

Below is a page from FWP supporting my theory that iBio would never go away because DARPA’s (Defense Advanced Research Projects Agency) Blue Angel Program funded most of $68 million to build the plant-based protein expression facility based on iBio’s licensed technology.IBIO_CDMO

The facility itself with iBio’s patented plant-based protein expression technology is worth a WHOLE LOT more than $14.14 million market cap in my humble opinion. It is also my 2 cents that anyone who believes in the science of iBio will be kicking themselves for not buying more here at this lowball price.  I gobbled quite a bit this week myself.  I think the short-sellers have no clue what they have gotten themselves into.

There are so many juicy updates on the FWP that I decided the one below would be a more representative of IBIO mega-potential:IBIO_magic bean

In my opinion, we are the early bird at the lowball price of iBio history.  You can either laugh at me or make a bet that if you win can literally transform your life.

Take a look at the lead book-runner of the secondary offering:IBIO_2nd_Offer Who is A.G.P./ Alliance Global Partners?  Go to their website and find out for yourself. Here is the page that I like. You can click-> here to go to the research page. The page stated the following:

While we are committed to continuously growing this sector of our business aggressively, it already includes a team of specialists in the following areas:

  • Healthcare
  • Technology and Media
  • Consumer Goods & E-Commerce
  • Energy
  • Industrials
  • REITS
  • Business Services
  • Shipping

Notice that Healthcare is at the top of the list.  I take it to mean that these guys know what they are doing and I don’t expect to see them having the problem getting funding for the iBio secondary offering. Of course, it is still a speculative bet so I’m betting with money I can afford to lose.

To sum up my 2 cents on iBio, the FWP is not a news release but an SEC filing; therefore, only investors who follow iBio were aware of the FWP report. Thus, any additional buying of the shares this week at lowball prices were limited to those who became aware of the FWP filing. And I bet that once A.G.P./ Alliance Global Partners announces the successful completion of the secondary offering, instead of price dropping further as short-sellers expect to see, I speculate a strong rally will ensue instead.  In other words, I bet that the lowball price we see now already reflected the secondary offering at its lowest point.  Will it go any lower?  There is always the possibility, and I will continue to add if it does.  Yes, my conviction on iBio’s tech is that strong.

There you have it, my complete 2 cents on iBio.  Like I always said, my thoughts here are my own opinion, and it supports my decision to hold and add.  It’s my own sword to wield, so take it with a grain of salt.

There are a few catalysts that can spark a frenzied rally on $IBIO, and $AEMD‘s hemopurifier is one of them.  If you re-read the Aethlon Medical Fourth Quarter Fiscal Year End 2018 Earnings and Corporate Update Conference Call transcript, you could sense a positive vibe from management regarding its correspondences with the FDA.  Below is an excerpt from the transcript:

AEMD_FDA_nearFutWhen FDA initiated AEMD’s hemopurifier medical device into the Breakthrough Device designation as a speed faster than anyone anticipated, what did that tell you?  A sense of urgency?  Would it be too much to expect that “more clarity in the near future” to mean “real soon”?

Hang on to your hat “IF” positive news is announced any day between now and real soon. Per my 2 cents, a blessing from FDA for commercial production will kick off an explosive rally for $AEMD and $IBIO.

LRAD has a new revelation this week.  1.3 million shares of $LRAD changed hand on Friday at $2.20.  The fact that a big buyer was willing to take 1.3 million shares off the hand of another big holder is very positive; otherwise, the price would have plummeted. With the big seller out-of-the-way, I see a rally coming especially when there is more news of sales to materialize in the second half-of-the-year.

Take a look at the weekly chart below:LRAD_weeklyPrice made a solid bounce off the 79 & 89 MA supports with substantial volume.  I speculate price will take out the $2.50 resistance soon enough.

$TRXC remains resilient despite broad market volatility. This is going to take a few years to gain a much higher price when proof of sales materialize while volatility remains high.  Short volumes from shortsqueeze.com reflected an increasing short position recently, from 23.9 million shares to 29.3 million shares, a whopping 22% increase!  This could either fuel a spectacular short-squeeze on surprise good news on sales or create a more volatile price action along the way.  I’m adjusting my position size according to my risk tolerance at this point.  If I miss the big jump without a large position, that will be my own fault; but I can still profit nicely over long-term if Senhance is adopted by the laparoscopy community.

Thanks to $LRAD up move, it helped offset drawdown from $IBIO so my port only gave back only a little.

Current positions (in alphabet order):

AEMD  IBIO  LRAD  SPXU  TRXC & cash (up 16.7% YTD)

My 2 cents

From my camera:

DSC02386

 

 



Categories: trading journal

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