It’s been quite some time since our last post and most of that has to do with increased work schedules. Teezy and I have been focusing on honing our skills on trying to figure out how the options markets work. In the past I’ve done pretty well trading options and I’ve also made some terrible moves. I once sold CENX shares 3 days too soon before they would have went from a small loss to a +9000 gain! In the next year I loaded options on CSCO and lost nearly 2500. It was then I knew I was a bit in over my head.
Early in 2011 the big news in the tech world was centered around a technology called NFC (Near Field Communicatoins). Rumor has it that phones will have NFC chips embedded into them so that things can be purchased/scanned via your mobile phones. Could change the way that business is done and do away with cash and plastic credit cards.
So how to invest in this technology? Through companies that make the NFC chips and companies that make the processors in mobile phones. With demand for iPhones and Android phones on the rise it wont be long before NFC chips are in high demand. I made small plays in NFC chip maker NXPI and some in ARMH (mobile phone processors). After a few rough patches I was able to sell both sets of contracts for about a 1000 gain overall. Probably could have been $2000 if I timed it better though.
The other play was TSLA options. They produces the top of the line electric cars (think sports cars). If the economy begins to boom and the gov’t gives tax breaks for owning electric cars then you know these copmpanies will begin to thrive. Just a matter of time really…
Back in late September CTeezy and I wrote about LQMT – Liquidmetal Techolologies. At the time they were fresh off signing a master transaction agreement with Apple which meant Apple had exclusive rights to use Liquidmetal for consumer technology products. The speculation was that they would use it in the new iPhone or iPad or Macbook. On the news of the signing the price of LQMT spiked to as high as 1.76 before eventually closing at .82. With no official deal in place it was unsure if Apple was just playing it safe by ensuring no competitors could gain an advantage over their technology by using this or if they actually planned to use this in their own products. the former case would mean no potential profits for LQMT. The latter could mean royalties for each new iPads/iPods/Macbooks sold in 2011 – YIKES!
Well – today the news has been leaked that the next generation Macbook Pros will be constructed using liquid metal. The stock, which opened at .64 shot up to as high as .84 before settling around .79 at the close. This is the highest close since the original news of Apple signing an agreement with LQMT back in August. The signs have been there for a couple of weeks now. Just recenty the Apple website changed its web design to use a darker color more in line with the color of liquidmetal. One would have to think that if LQMT makes sense for Macbook Pro’s – it might also be included in iPhone5 and iPad2. History tells us we wont the details of that until sometime in June.
In any case, LQMT looks like its about to breakout to uncharted territory should any official word come from Apple on the use of this technology. I mean it makes perfect sense to do so. Wouldn’t be shocked to see this run past $1 very soon.
Let’s take a look at AEterna Zentaris, Inc. AEZS is an oncology drug development company that is currently working on a NDA for their leading Phase 3 product, Solorel, which is an oral diagnostic test to catch Adult Growth Hormone Deficiency. The NDA should be completed sometime this year. They are also using the Investor Relations Group (IRG) to update investors on the progress of AEterna’s products through multimedia initiatives and social networking.
Today, the share price hit $1.68, with a 52-week high of $2.19. However, this was a $3-$4 stock 3 years ago and even hit $8 back in 2004. If this NDA for Adult Growth Hormone Deficiency passes, I can’t see why this price doesn’t eventually get back up to the $4 mark and maybe even higher. They are backed by Wellington Management, their top institutional investor and a sound asset management company. The share price has gone up over 36% in the past 3 months, so I would look to scoop some shares and hold for the long run. I’m currently not invested in this company myself, but if I see a drop back into the low $1.50 range, I may reconsider.
The last few months have been a bit grueling. Work, Holidays, Dates, Travel, etc. Regrettably there hasn’t been too much time to study the market. I made a a couple plays during the end of 2010 but they were all big losers (CSCO Jan ’11 Calls, GRYE mostly). I disobeyed the #1 rule of trading IMO – ALWAYS DO YOU OWN DUE DILIGENCE. I made one pick based off of a pump and dump Newsletter and another off of a hasty reaction to a earnings report. ALWAYS DO YOUR OWN DUE DILLIGENCE – can’t stress it enough when making stock picks. Just because you read something somewhere that says a stock has a target of $20 when it currently trades at $12 doesn’t mean its going to get there. The information is only as good as its source. Trust yourself with your decisions and learn from your own mistakes.
With that said – CTeezy and I finally found some time to sit down and crunch through some stocks last night. January is one of our favorite months to trade because, much like your local mall, many items can be had for bargain basement prices. A lot of stocks get sold off towards the end of each year for tax purposes. Short sellers know this occurs and pile on to drive stocks down even further. No big deal to the longs though, they get a bigger tax break by selling before December 31st then just have to wait 30 days to buy back their shares at lower prices the following calendar year. Its like riding a ferris wheel 2 times but only having to take the big drop once…
Ok enough blabbing – here are your “2011 Bounceback Canditates”:
GAPTQ – The Great Atlantic & Pacific Tea Company
My favorite pick. We’re talking about a small grocery company founded in 1859. Places like this usually find ways to make it out of hard times. Either that or they merge with another medium sized company (a la the Kmart \ Sears merger). Down over 90% after filing for Chapter 11 bankruptcy back in Decmeber, the company is now in stages of restructuring. They may close some stores but should still make themselves attractive enough to get by. Rumor is they’ve made some bad decisions in the past that , if corrected, will save the company a lot of money. Either way, I like the chances of this stock to rebound enough to warrant a recovery.
The name of this company should be the name of the newsletter that recommended its readers buy GRYE last November … but actually Constar may be able to bounceback in 2011. Constar is in the packing industry and recently have filed for bankruptcy. They’ve already been told by the NASDAQ that they would be delisted on January 20th and I’m waiting for that to occur before buying. Constar hit a new 52W low of .42 on January 18th. I may wait a few more days to see if it bottoms out further once it hits the OTC or Pink Sheets.
Another company beaten down recently the last 6 months. Any investor that bought this stock last year hoping to catch that next “green solar stock” probably suffered some losses so why not sell, lock in some losses then buyback in 2011 for less. Not like green technology has really taken over yet, right? I like this one as a quick runner back too the $6s soon … Solar companies are going to keep getting tax cuts as long as our government keeps pushing for alternative energy solutions
Note: I may be long, short, or hedged with any of these securities at anytime. I post my thoughts here as a learning tool for myself and hopefully others too. Always do your own research before making your own trades!
Happy new year everyone! I was kinda laying low for awhile and took some time off from looking at the market every day (which is very good to do from time to time). To update you from my previous post (back in October…..eek), I was still in on SPEX and had actually bought in a couple times more. My latest buy-in was at about .81.
While the stock wasn’t doing much to start the new year, Tendo mentioned to me that at the end of a trading year, most traders sell their shares to lock in their profits (or losses) for tax purposes for that year. Since this is a known thing, you’ll notice a lot of selling (or shorting) at the end of the year. These same traders hope that the price will drop so that they can buy in at a much lower price in the new year. SPEX closed out at .85 on December 27th, 2010 and didn’t close out again at that price until Jan 12th, 2011. I see some buying potential here.
Another confirmation of this is based on the SPEX chart below:
Notice the 4-day uptrend starting on January 10th. However, what I also want you to notice is the RSI (Relative Strength Indicator), which measures the momentum of a stock’s price movements and the speed it changes at. The RSI oscillates between 0 and 100, and it’s been known that anything over 70 usually signifies the stock as being overbought, while anything under 30 signifies it is oversold. So it looks as though SPEX may be a bit overbought right now.
My technical prediction: I’m looking for a high volume day tomorrow, but a narrow range of trading compared to the previous days. I feel we’ll see some gains, but not huge ones. If this happens, prepare for a red day on Monday. This is solely based on my technical analysis, so if major news comes out announcing, say, a major Pharma buyout, then up we go!
And of course, please do your own DD before investing in any securites.
Looking for a risky bounce play? Keep your eyes on NGAS (Natural Gas Resources). After announcing widening Q3 losses shares plummeted to a new 52-week low of .35 during trading on November 10th. This price also represented the lowest price the company has seen in the last 5 years. Can’t say I’ve had time to do my due dilligence (DD) to figure out the cause of this drop as of yet, but I will in time. All I know is that anytime a NASDAQ stock with a long history and a 50 day MA of .73 makes a significant drop on the heels of an earnings announcement I’m ready to buy the fear make back a few bucks. I’m going to be watching the action on this one very closely the next couple of trading sessions. If we see a continued drop tomorrow I will hold of and wait till a new bottom is formed. At the first sign of a turnaround I may look to scoop up some cheap shares and maybe snag a quick 10-15% gain.
What a crazy day today was! In case you didn’t hear, Spherix announced that their Phase 3 Trial of D-Tagatose for treatment of Type 2 Diabetes revealed satistically significant reduction in HbA1c (blood glucose) levels. This shot the stock all the way up to as high as 2.80 Pre-Market! I was pretty stoked, since this was one stock I’ve been following since the beginning of this year. It was leveling out at the 1.70 range, which I was okay with. A 25% gain is good in my books. The sun was shining after 2 days of rain, my iced coffee tasted much better, and work was even quiet in the morning. It was going to be a good day.
Not so fast, Teezy.
At sometime around 1PM today, I walked out of a meeting I had and went to see how SPEX was doing. My jaw nearly hit the floor. The price plummeted to 1.18! What the $*#@ is going on?? This can’t be happening, can it? I felt like I was living my GNVC nightmare again. Then I looked over to a related article:
The company sold $5.25 million of shares and warrants to institutional investors to continue development on D-Tagatose as well as corporate reasons. I was livid, but as I thought about it, it made sense for the company. It sucked for us investors out there though. It also brought me back to that pain point from my past: not capitalizing on my gains.
However, all hope is not lost. What’s next for this company is they are going to either look for a Big Pharma to buy them out, or if that doesn’t happen fast enough, they are going for FDA approval of D-Tagatose. Both outcomes will shoot the stock up. Let’s take a look at it’s 6-Month chart:
I looked up the company’s volume since it’s inception into the market, and today was it’s highest volume ever (it more than doubled the 5M volume it had back on November 16th, 2009). Also, it’s 6-month low is around $1.00. As crazy as it sounds, I’m hoping the stock gets closer to $1.00 so that I will be able to scoop up some more shares. I’m more in this for the longterm, so I don’t mind having to wait until FDA approval to see this stock skyrocket. Pay attention tomorrow to see what the stock does and how high the volume is. I have a gut feeling it’s going to be up on the day but still drastically below the range it was at before noon today.
The first domino in the MJNA play has fallen … softly. “The Hemp Network”, although originally planned to launch in early August, has completed the soft launch and is now offering the first line of “Nature’s Ancient Wisdom” products to customers. It is rather encouraging they were able to attract 3200 potential distributors from all around the United States for this launch. Not a bad start for a new division of MJNA’s business.
What I’m really waiting for though is the upcoming Prop 19 vote in California on November 2, 2010. I’m not so sure the vote will pass this time around but as long as the rejection rate is better than it was in 1973 (66%-33%) I think there could be an interesting future ahead for this company.
On a purely technical side, the MJNA chart is once again sitting near the 50 day moving average. Thursday’s trading session saw unusually high volume just as the stock moved below the 50 day moving average. To me this signals the start of another move. As the vote nears, the news will begin call more attention to the ballot and MJNA may get some movement. One to keep an eye on for sure. Wouldn’t be surprised to see a climb to the 200 day moving average of .15
For those of you that follow my trades on Covestor you may have noticed that in late August I purchased shares of LQMT (Liquidmetal Technologies). CTeezy made mention of this purchase in early September. I have to admit, I’m actually really upset I didn’t find out about LQMT back in early August when shares could be had at a paltry .28 per share. At that time, LQMT was a company with a revolutionary idea, a lot of debt, and no real marketable products. Enter new CEO, Thomas Streipp, a leader with 30 years experience growing global technology companies. Streipp had been running long time tech company Symmetricom (SYMM) from 1998 to 2009 before joining LQMT. Sounds like he put his connections to good use right away as a quiet SEC 8-K filing was issued which announced that LQMT had entered into a Master Transaction Agreement with Apple Inc (AAPL). In exchange for a large license fee LQMT would essentially grant Apple exlucsive rights to the liquid metal technology in the consumer electronics field. Interestingly, the wholly owned subsidiary is called the “IP Company”. Hmmmmm what do we know that begins with “IP” and is associated with Apple?
Yeah. Just about every product begins with “IP”. iPods and iPhones and iPads oh my! It’s no secret that the world loves Apple products as evidenced by the millions of iPods seen being toted around each day (when I last checked Apple had sold over 110M iPods since the device was first launched). The true Apple geeks of the world especially got excited about this news. That’s why when word got out that Apple was interested in something called liquid metal, the internet blogosphere lit up with questions as to what Apple may be trying to construct. Maybe their own T-1000?
Ok, maybe that was just me, but I do believe most thought that this technology might be used in future models of the “IP” prefixed devices. Whenever sites like Gizmodo and Engadget pick up on this kind of news you are bound to attract some excited investors. It should have come as no surprise then that LQMT saw its share price rise about 500% in a matter of days. Who really knew what Apple was up to?
Almost as quick as the stock rose, it fell – as it should have – once the initial buzz of the news with Apple wore off. I, personally, was happy to see the drop because I had completely missed this initial runup. I waited for the chart to settle down a bit and ended up picking up some shares at .65 (a bit early) and later again at .56. To me it almost seemed like in the DAYTRADER’s mind this stock was just another pump and dump scheme. How many times have we seen the old, “throw a big tech company’s name in with the name of a small tech company’s name and attract buyers” trick. Normally one would think the fun is over, but despite this sell off the non-trader/geek world still remained abuzz wondering what may be in store with this new revolutionary material. As such the stock price has slowly begun a climb back to the .80 rang. The fact that this seems to have generated all of this buzz makes me think that we could see another run if any news is leaked regarding Apple’s involvement with the company. It is for this reason, that I’m speculating on LQMT as a potential breakout play.
I must say though, despite that fact that I am extremely bullish on this stock, it does carry with it IMMENSE amounts of risk. I mean, this company is trading on the pink sheets for a reason. I wouldn’t be surprised at all if Apple simply bought the rights to this material to keep other competitors away. Why chance someone coming out with a lighter version of an iPad or iPhone? Apple could just as easily cripple LQMT in the consumer electronics market as they could make them.
Additionally, as is common with stocks that rise very quickly in price, we could see some dilution coming at some point. This could send the share price right back to the .28 cent level that was seen for most of 2010.
All in all, I find LQMT to be one of those companies worth taking a small gamble on. I can’t even begin to guess what my target price would be if some large deal or buyout were to happen but I’d have to say that $1.70 per share could end up looking like a bargain in 2011.
I stumbled across this today even though it’s a week old. Spherix announced that it’s Phase 3 product, D-Tagatose, “has been selected as one of the top 10 most promising cardiovascular/metabolic therapies in development,” according to a business analyst group assembled by Windhover Information. Spherix plans to announce the Phase 3 results in the next few weeks, and according to the article, “to date, there do not appear to be any significant safety concerns in the Phase 3 trial.”
