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.
Uh oh… We got a perfectly formed red spinning top this week on the SP500 weekly chart. And on top of the spinning top is the historical high resistance. To me, that spells trouble. As you’ve known, my years of observations tell me that spinning top (or doji bar) near resistance has a better than 50/50 for topping formation. Are we expect to see a downward momentum from here? We may see a confirmation next week.
This week was an even week for me with winners offsetting losers. As mentioned in my last week post, I reduced my exposure to $TRXC before its earnings release; therefore the damage was minimal when price took a negative turn after earnings. However, I missed $CARA after earnings because the price zoomed up immediately after the market opened and I did not want to chase it. While I’m waiting for a more reasonable price to get back in, I may miss the uptrend if price continues upward from here.
$AMRN bounced nicely from last week spinning top bar sitting on Fib 61.8% retracement support. We may see a gradual upward momentum as we pass through mid-August next week and head into September where the looming Reduce-it trial result will be released. Who knows, we may get a surprise early announcement before the end of August. For some reason, I’m feeling very confident that the result will be positive. Although I’m optimistic, I’m not as foolhardy as I used to be. Instead of holding a mix of common shares and Jan 2019 call options, I decided to drop the common shares and buy the Jan 2020 LEAP call options. Now, I’m loaded up on call options expiring on Jan 18, 2019, and Jan 17, 2020, in favor of holding common shares. The most I’ll lose will be the premium I paid for the call options; this is about 37% of the market value of the stocks based on the number of shares I could exercise. If I hold common shares and Reduce-it fails, I will lose more than 50% instantly; so losing a maximum of 37% of the current market value based on my premium cost reduces my risk somewhat. The beauty is that I can exercise the Jan 2019 call options to own the stocks if Reduce-it result is positive and ride the Jan 2020 call options for all of 2019. I’m thankful for the price drop that gave me the opportunities to buy the call options at a bargain price. As far as I’m concerned, recent price drop has no relevance to the Vascepa efficacy in the Reduce-it trial; in fact, it only serves to lower the betting price for those who haven’t made a bet yet. I’m very comfortable with the way I laid out my bet. I’m all set waiting for the green light to go on in the Reduce-it result. It is GAME ON!
$LRAD is reporting earnings on Tuesday, August 14, 2018. Giving this week green bar, it feels like the last two weeks of correction after eight weeks of up bars is over. With positive guidance, we may see more green bars ahead. I’m already loaded up on this baby and have no intention to sell for a while.
Sidebar: Although the U.S./Mexico border wall is a long shot, the fact that three out of the five wall prototypes carried the long-range acoustic devices developed by $LRAD means that its technology is being acknowledged in a BIG WAY. Therefore, I wouldn’t be surprised if some bigger companies offer to buy it out.
$IBIO is a funny stock now. I’m amused sellers are trying to push this down. Base on my last calculation, the company should have about 17.4 million outstanding shares. This translated to a market cap of $12.4 million (17.4M x $0.713 Friday close) while iBio’s cash-in-bank should have an expected cash balance of over 20 million dollars. Short-sellers can keep walking the price down in current low volume situation since there are no new buyers without revenue-generating news. And here is the thing, eventually, the short-sellers will have to cover when the company begins to show progress. As quickly as the short-sellers took it down, they will drive it back up even quicker because new and existing investors will be competing to buy the shares as well. Don’t forget that despite recent dilution, the float actually decreased due to Eastern Capital (Kenneth Dart) owning a lion shares of the company.
As I have said before, iBio is my bet on science, not price fluctuation. Eventually, the science will prevail because it is needed. Not to mention the potential of its IBIO-CFB03 for the treatment of systemic scleroderma, idiopathic pulmonary fibrosis, and other fibrotic diseases. Right now, it is a game of waiting despite adverse price fluctuation. Short-sellers “think” they have the upper hand right now. Haha! Wait until they have to buy back the shares; the joke will be on them.
$AEMD is taking a hit mainly because we neither heard from FDA nor from NCI regarding moving forward the exosome study to Phase 2 cancer study. Yeah, waiting is a drag; but it is all part of my perspective in speculation/investment.
From my perspective, speculation is like hunting. While I’m not a hunter myself, I did read a few autobiographies on hunters. In essence, besides the experience and knowledge of tracking the game, most of the time, hunting is just waiting. In other words, waiting is all part of the game.
Thanks to $AMRN and $LRAD, my port did not give back much despite drawdown on $IBIO and $AEMD
Current positions (in alphabet order):
AEMD AMRN IBIO LRAD & cash (up 13.4% YTD)
My 2 cents
From my camera: