Weekly thought on $AEMD, $AMRN, $CGC, $IBIO, $LRAD

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.

I’m so glad to see that the SP500 turned around mid-week to rally back to close green for the week; otherwise, the spinning top last week could be a predictor for more downtrend.  This is no longer the case because of the green close.SP-500_weekly Based on this week green close, I expect to see a continuing rally to take out the resistance of the recent historical high soon. Basically, the bull market is still in control.

This was an exciting week for me.  $LRAD, $AMRN, and my new position $CGC were all doing great for my port.

I bought $CGC.to get back into the cannabis market because Canada is on the verge of legalizing adult cannabis use.  Officially, October 17, 2018, will be the day when Canada allows legal use of recreational cannabis at their federal level.  Initially, I just could not get myself to buy cannabis stocks trading on the OTCBB or Pink Sheets exchanges ’cause it was hard for me to separate the garbages from the gems. (My previous attempts using $MCIG, $SIGO, and $GRWG although profitable were filled with anxieties due to the exchanges they are trading on.)  Upon digging deeper, I discovered that Constellation Brands Inc. ($STZ) invested $4 billion into Canopy Growth Corporation ($CGC) this past Wednesday.  Whoa! I couldn’t be happier!  Finally, a cannabis company trading on the NYSE with $4 billion in the bank for global expansion.  Not to mention the advantages of branding power and global distribution reach that Constellation Brands has to offer.  The way I see it (aka my 2 cents), the synergy of Constellation Brands and Canopy Growth Corporation is going to create a cannabis brand that the world will learn to trust.  Imagine the prospect of creating the Corona of recreational cannabis drink, the Marlboro of cannabis joint, and the Tylenol of medical cannabis under this exciting partnership.

What makes you think there is synergy between the two companies, you may ask?

Below is an excerpt from the recent earnings conference call that, per my 2 cents, reflected all the signs:

CGC_synergy

Just from reading the above excerpt, I can tell that both companies are eager to work together to bring their cannabis products to the next level of professionalism- one that has global branding power.

I consider myself lucky to be looking into the cannabis sector on Wednesday night when I learned that Constellation Brands announced their investment on the same day.  Without hesitation, I bought $CGC Thursday morning.  Although price went down below my entry point by close of Thursday, I didn’t care.  Actually, I added even more. The reason I bought $CGC with zero hesitation was that where else can you find a cannabis stock trading on the Big Board (NYSE) with $4 billion in the bank?  This is unprecedented, and despite high valuation, I’m betting the price will continue to rocket from here when the Constellation/Canopy partnership begins their global expansion on top of Canada opening the recreational cannabis market.  I’m just excited to learn about the Constellation investment on the day it was announced because if I have learned about it a month or two afterward, I don’t think I can pay under $32 for each share.  This is like buying Netflix before online streaming became mega-popular.  In other words, buying $CGC now is like buying a well-funded cannabis stock before cannabis becomes utterly legal at the federal level globally.  This is definitely a buy, hold, and forget stock to own.

Technically speaking, $CGC is looking to break out of the $36.55 resistance soon.CGC_Weekly Look at the volume for this week.  Without the $4 billion infusions from $STZ, the $36.55 resistance on the chart would be hard to take out; but the fact is that the $4 billion is a reality that cannot be ignored.  As far as I’m concerned, the $36.55 resistance is a non-event and price will merely run pass it like “what resistance?”

$LRAD earnings update was very encouraging, and I could see a bigger revenues stream coming soon. Per earnings update, “Fiscal year Q3 for 2018 was a fourth consecutive quarter of more than $7.5 million in revenue.” It seems to me that there are expectations of more army orders coming soon.  The clue came from the excerpt below:

LRAD_army orders

Besides army order, the next significant catalyst has to come from their superior mass notification system. Below is another excerpt supporting a potential deal that can transform LRAD into a much bigger company than it is now:

LRAD_country-wideWhile previous management bungled the deal to install LRAD’s mass notification system into a Middle East city, I believe the new management is not going to make the same mistake. Together with a software platform, I think the NEW mass notification system under the NEW management team is going to make a NEW history for LRAD.

Technically speaking, price closed above $3 on Friday and that spoke volume!lrad_monthly As you can see on the monthly chart above, the last time price printed $3 and above was back in November of 2014.  $LRAD has come a long way to finally redeem itself.  Their technology is finally taking traction and I believe the world is ready for it.  My 2 cents is that exciting time is ahead for $LRAD!

$AMRN continued to bounce higher getting ready for the Reduce-it trial result.AMRN_weekly At this point, the chart above doesn’t really mean anything anymore because the result of the Reduce-it trial will be the catalyst to define the next direction of $AMRN.  All price action before the trial result is just noise from investors trying to decide on making a bet on the result.  As I explained in my previous blog post, I’m all set with my Jan 2019 and Jan 2020 call options on $AMRN.  I’m not holding any common shares for the bet.  Although I believe Reduce-it trial will be successful, common sense required that I limit my risk accordingly.  The call options strategy fits my risk tolerance perfectly.

$IBIO and $AEMD are the only two stocks in my port that are still in hibernating mode.  My 2 cents is that sellers are like sheeps cavorting next to the cave completely oblivious to the “going to be starving” grizzly bear hibernating inside.  Btw, this grizzly bear sleeping in the cave is NOT related to the bear as in short-sellers.  No, the grizzly bear will devour the short-sellers when it wakes up.  Bank on it!

Ha! That’s all I’ve to say about $IBIO and $AEMD.  For I’ve no doubt that the technologies behind $IBIO and $AEMD will shine sooner than later as we head into the end of 2018.  So, I don’t concern myself with the current price actions for both.

Thanks to $CGC, $LRAD, and $AMRN my port gained back some despite drawdown on $IBIO and $AEMD.

Current positions (in alphabet order):

AEMD  AMRN  CGC  IBIO  LRAD & cash (up 16.7% YTD)

My 2 cents

From my camera:

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Categories: Daily trading Journal, trading journal

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