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.
The SP500 rallied again this week, and the upward momentum continued. As you can see on the weekly chart above, the price is now approaching the previous all-time high. Will it create another potential double top at last historical high or will it just take out previous high? Price in the next few weeks will be telling.
This week, I changed the allocation of my portfolio to adjust my risk I made change to $AMRN holding, sold my $CARA position to watch how the market reacts to next Tuesday earning releasing after hour, and reduced my $TRXC position to observe how market reacts to next Tuesday earnings issuing in early morning.
$AMRN opened lower on Monday, and I took the opportunity to load up on Jan 18, 2019 call options with various strike prices to effectively lower my risk in betting on the eventual Reduce-it trial result. My risk is maxed out at the premium I paid for the call options plus whatever common shares I may be holding. Because I already loaded up on call options, I won’t be holding as many common shares as before. Despite my belief and opinion that Reduce-it trial will be a success, I’ve to respect the risk and bet accordingly to how much I’m willing to lose if I’m wrong.
However, if I’m right, I’m also betting that the reward will be tremendous! My strategy is to exercise enough call options once the Reduce-it trial is declared successful so I can have an allotted amount of common shares for the long-term hold. I’ll probably wait until Jan 2019 before deciding how many call options I’ll exercise. As mentioned in my last week blog post, I’m betting that there is going to be a bidding war from BPs looking to use the success of Vascepa to revitalize their statin brand. Pfizer’s Lipitor brand, in my opinion, has the most to gain by combining Vascepa with Lipitor to create new patent protection for the next x years.
Technically speaking, this week formed a nice looking green spinning top bar. As you can see in the weekly chart above, the spinning top bar is sitting on the Fib 61.8% retracement (from Feb 2016 low to Jan 2018 high) support. Per my book, a doji or spinning top bar near support has a better than 50/50 probability of a bounce. Therefore, I won’t be surprised if we see a rally from here.
$LRAD dropped slightly this week as part of the consolidation after eight weeks of the bullish green bar. I see this week decline as usual as zig-zag movements. The weekly chart above shows that the overall trend is still up.
$TRXC formed an “almost” doji bar this week. Because of my belief that doji or spinning top bar near the top has a tendency to reflect a “topping,” I decided to play safe and reduced my position to wait for Tuesday morning earning report. If it is good and price rallies, I’ll have to buy back at the higher price.
$IBIO and $AEMD are both buy and hold to wait for catalysts to occur so their weekly movements don’t affect my holding. However, I did add a bit more $AEMD due to Friday drop to $1.20 area.
Due to slight dips on most of my positions, my port gave back a bit for the week.
Current positions (in alphabet order):
AEMD AMRN IBIO LRAD TRXC & cash (up 13.8% YTD)
My 2 cents
From my camera: