Weekly thought on $AEMD, $IBIO, $KNDI, $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.

There is no question about it, the broad market is going up. SP-500_weeklyThis is all good for stocks in general.

A whirlwind of activity ruled my week that also caused me to change my portfolio allocation. This week, I dropped $AMRN, $CGC, and $MARK out of my port.  Last week, I brought up the issue of diet change as an unknown factor in the Reduce-it patient population that could unpredictably affect the result. Hence, I felt this unknown factor raised the risk of the bet to the level of a casino bet where the bet favored the house instead of the bettor. As a result, I dialed down my bet significantly by closing a big chunk of my call options. This week, I felt that since the 2017 interim data review did not force an immediate stop to the trial due to extreme efficacy (e.g., more people die from the placebo population), I felt that the trial was being continued to dig for subgroup data benefit.  Thus, I closed out my remaining Amarin call options this week and resigned to watching the result expecting by the end of next week on the sideline.

$CGC, despite being up on Monday, formed a daily doji bar with the position of the doji bar sat directly below the recent daily downtrend line.  Since my observations told me that doji bar below resistance usually foretold a correction, I decided to take the $5+ per share profit since my entry point was at $43.xx.  The rest of the week, I tried to daytrade $CGC but the volatility exacerbated by $TLRY huge swing made it challenging to find a short-term bottom to hold without being whipsawed to pieces, so I stopped trading $CGC to preserve my focus for other activities.  $MARK continued to get sold down each morning after trading over previous day high that I decided to sell the position to allocate more fund to bet on $KNDI.

This week, I supplemented my stock position by buying $KNDI call options expiring on Jan 17, 2020.  This allows me 16 months of breathing room to give Kandi a chance to exceed the $5 strike price by leaps and bounds. I am betting that the EX3 electric vehicle, recently approved for tax-exemption in China, is going to become a popular EV among the cost-conscious middle-class population who wants to own an EV to help combat China’s massive pollution problem. I believe the EX3 has a good chance of winning the appeal of the middle class because it is, after all, a copy of the popular Geely Vision X3 gasoline SUV manufactured by Kandi’s partner Geely. Below is a sales record of the Geely Vision X3:

KNDI_GeelyX3Vision_SalesSource: http://carsalesbase.com/china-car-sales-data/geely/geely-vision-x3/

The eight-month total for 2018 (not reflected on above table) = 84,518 units.

Vision X3 bigger brother, Geely Vision X6 gasoline SUV also generated consistent unit sales of average 10,000 units per month.

Geely Vision X6 gasoline SUV ‘s sales record of the Geely Vision X6:KNDI_GeelyX6Vision_Sales

Source: carsalesbase.com/china-car-sales-data/geely/geely-vision-x6/

The eight-month total for 2018 (not reflected on above table) = 81,200 units.

Don’t forget that the above unit sales for the Geely Vision X3 and X6 were hampered by China’s lottery system to buy ICE vehicles. Without the strict lottery system for owning an EV, can the EX3 beat those sales unit of the Geely Vision X3?  I’ll leave it to your imagination about how big Kandi can become once the EX3 starts to rack up sales in the coming 4th quarter.

Below is cut/pasted of March 2018 news unveiling the All-Electric SUV Geely Global Hawk EX3:KNDI_EX3 news

Wait, I’m not done yet. Here is an article from Time.com that supports the eventual success of the EX3, “Why China Will Beat Tesla in the Electric Car Race.” Below is an excerpt highlighted China’s resolve to fix their pollution nightmare:KNDI_Times1 Below is another excerpt from the Time.com article:KNDI_Times2 China is expected to spend some $60 billion in EV subsidies preceding 2020, and Chinese automakers are expected to produce more than 4.5 million EVs annually in 2020.  Let me repeat, 4.5 million EVs are expected to be produced by Chinese automakers annually.  Since we are at the tail end of 2018, that is only about 15 months to the beginning of 2020.  Meanwhile, to reach the 4.5 million EVs annually by 2020, the race to ramp-up production and selling EVs between now and end of 2019 is ON.  Although Kandi was not mentioned in the article, do you really want to bet against that the EX3 will be a respectable part of that ramp up production and sales?

Here are my final 2 cents, stubborn doubters will naysay Kandi to dead without opening their eyes to China’s resolve to lead the EV revolution.  Kandi, a partner with Geely in Kandi JV, is a Chinese automaker in China.  It has four plants ready to produce EVs to participate in China’s EV revolution.  In a nutshell, will you rather believe in Kandi’s naysayers and miss the coming monster rally in $KNDI (my 2 cents, of course) or join the risk-takers in making a calculated risk that Kandi & Geely jointed production of the EX3 will take Kandi to the next level as a BIG Chinese automaker?

Technically speaking, $KNDI broke through the 79 & 89 weekly MA resistance with solid volume. kndi_weeklyAlthough price fell back on the 79 & 89 weekly MA support, I expect to see price continues higher next week. We could see consolidation around $6 with no news to create a handle for the Cup & Handle breakout, or it will merely beeline to $7 or $8 with the more good news.

Here is my bet. With the tax exemption in hand, Kandi is going to break sales record in the 4th quarter selling the EX3, and $KNDI will soar and never look back. It is my 2 cents that anyone who hesitates is going to miss the boat.  Friday drop back to mid-$5 is a gift as far as I’m concerned.

$LRAD announced the following news this week, “LRAD® Corporation Receives $2.4 Million in National Guard and U.S. Military Orders.”  Basically, in less than 30 days, LRAD generated the following sales:

  1. $11.0 Million US Army Program of Record Order @ 08/23/2018
  2. LRAD® Corporation Announces $1.0 Million Mass Notification Critical Infrastructure Order @ 09/13/2018
  3. LRAD® Corporation Receives $2.4 Million in National Guard and U.S. Military Orders @ 09/20/2018

That is a total of $14.4 million sales in less than 30 days.  While the stock price did not rally to reflect the new sales, it is my 2 cents that it is inevitable that a breakout is coming because the sales we saw so far, per my 2 cents, is just warming up numbers.  When more sales continue to roll in, I expect to see that the motivated sellers’ shares will be gobbled by buyers in no time.

Technically speaking, this week formed a doji bar next to support of the recent breakout line @ $3.01. LRAD_weeklyPer my observation, a doji next to support has a high probability of moving higher; therefore, I expect a bounce is coming for $LRAD.

$IBIO weekly chart is looking better and better. IBIO_weeklyNotice that the 5 MA (solid blue line) is about to penetrate the 15 MA (solid brown line).  Any day now, news release of either new contracts announcement or filing of IND for its IBIO-CFB03 for the treatment of systemic scleroderma, idiopathic pulmonary fibrosis, and other fibrotic diseases will take $IBIO back to over $1 and beyond.

$AEMD received good news through NCI, “Aethlon Medical Receives National Cancer Institute Award.” The significance of this news is in its underlying tone that is best expressed by the following excerpt below: AEMD_NCI-award

“To revolutonize treatment regimens by replacing them with ones that are more effective, less toxic, and improve the rates of survival” sound good to me and the fact that NCI issued the award means the possibility of using exosomes as a treatment solution is still ALIVE!

Wait! This news is still about the Phase I for the total grant of $298,444, what about the Phase II grant for $1.5 million mentioned before?  Below is an excerpt answering this question: AEMD_NCI-award2So, we should expect some news next week regarding the Phase II grant then. This is excellent progress for the use of exosomes in the cancer treatment while we are waiting for FDA to give final guidance on the hemopurifier for virus removal.

Technically speaking, $AEMD reflected a solid green bar for a healthy bounce. AEMD_WeeklyIf there is an NCI Phase II grant reward announcement next week, I see $AEMD going back to $1.30 if not $1.50 level.

Thanks to profit-taking on $CGC, gains from $LRAD, $IBIO, and $AEMD, my port gained back some to make a historical high in asset value.

Current positions (in alphabet order):

AEMD  IBIO  KNDI  LRAD & cash (up 34.4% YTD)

My 2 cents

From my camera:

Saturday afternoon 010

 

 



Categories: Daily trading Journal, trading journal

Tags: , , , ,

2 replies

  1. you have been talking about $IBIO since Jan 2018 or before not sure. I just went to Jan 2018 posts. This stock just keeps going down.

    • I’ve been holding $IBIO for years. Some stocks take longer to incubate before it’s ready to sprout. My bet is that when it is time to sprout, the incredible growth that comes will be well worth the wait and patience. Thanks for reading. Cheers!

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