Weekend Stock Report- Attack Capital?

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SP 500 UPDATE, ATTACK CAPITAL PLANNING, AND STOCK IDEAS!

Another volatile week just went by but importantly for now the SP 500 climbed back past the 2035 resistance line we had some concerns with.  Our trading ranges were pointed out to SRP members as 1985-2035, above bullish and below bearish.  The ECB kicked a bond buying program into gear effectively on Thursday that was more than expected, enough to push the market to 2061.  We did pull back on Friday though, so expect continuing volatility ahead.

125 sp 500

To wit, the SP 500 is only up about 3% in the last 6-7 months from July highs.  We obviously are in a resting period for the bull market and in a trading range.  This causes frustrating at times as you can see certain stocks or sectors soaring out of the blue like the Airlines this past week, and others dropping hard and then rallying a week or two later. (Chip stocks a few times, Biotech etc). This makes for difficult trading and even investing or position trading environments.  Sometimes, all of the positions you are holding or SRP is recommending and  covering are in consolidations with no real net movement.  The 5% up move that looks poised to break out, then turns right back down causing more  frustration.  You expect to hold for the breakout that looks obvious on the charts (HOLI), and then you get slapped upside the head with a decline on no news out of nowwhere.  This is the environment we are dealing with right now, so getting Alpha is the key… and also difficult of course.

It is key during these periods of market consolidation to take profits a little faster on swing positions as your 5-8% gain can disappear quickly and breakouts are few and far between.  It is also though a good time to use the downside volatility to your advantage with Attack Capital.

ATTACK CAPITAL AND CLDN SAMPLE:

We used some Attack Capital this week at the firm when CLDN dropped once again out of the blue from $18 early in the week to as low as $15.81 on Thursday. Our opinion is we have done the research, we have evaluated the opportunities, balance sheet, share structure, catalysts, management and more. So often you will get these downdrafts that come out of the blue, a waterfall type move over 1 or 2 days.  It can happen at anytime with almost any stock in the universe.  We always have attack capital (cash) ready to deploy aggressively when we see these anomolies.  When CLDN dropped again this week we bought from 17-17.40, then 16-16.40, and then more at 16.73 over a few days. We bought as low as 15.98 and saw 17.20 just 2 trading days later for a 7-8% swing.  The bank doesnt pay you 7% in a few days right? So the way we look at big downdrafts in our favorite names is an opportunity to make some interest on our attack capital.

Attack Capital Planning:

Mentally we have an image in our mind that as we are adding and (in this case CLDN,  the stock, is declining to 17, 16.80, 16.50, 16.30, 16.10 and so forth)…  that we are going to earn interest on every dollar we use to buy more stock during that waterfall decline.  This is literally how we look at it in our minds so as to have the fortitude to attack wth our cash, and not hide in a bunker or under a desk.  We assume the stock will head back up at some point from the senseless decline and pay us interest for having the strength to buy. Most waterfall declines are computer generated stop loss selling, margin calls, more stop loss selling, then panic selling by traders. Use it to your advantage, don’t panic…

We also respect the market and do not pretend we are going to pick the exact bottom and plow one big trade of cash in at just the right price.  That is not a risk reward metric that works in the market, because most often you will have put your attack capital in all at once, and had you waited one more day you could have picked up more shares much cheaper.  When you use attack capital, scale in over many trades over 1-2 days on a decline, never pretend you are smarter than the market or the computers and you can pick the bottom, its not going to happen that often. Worst case you only got a small amount and the stock heads back north, best case you get more shares cheaper lowering your average and making more $$ when the stock reverses.  This avoids the common mistake of thinking you are smarter than the market and you plan to pick the exact bottom. More often than not a stock in a sell off declines more than you planned or thought it would.

There is nothing wrong with then selling some of your stock you bought with attack capital on the way down when the stock reverses back up and banking the gains while holding a core position.  In fact, with core long term positions like we have at SRP, it makes total sense to trade around the position a little bit for best results.  If you are skilled at it, you can lower your net cost with your trading and maintain that long position for the upside you are projecting.  At our firm, we always look for big declines in our favorite names and then we slowly add to those positions as the stock drops, and we keep on adding and adding a little at a time… try it sometime if you can stomach the drop.  Dealing with paper drawdowns is mentally tough, but financially rewarding if you have a plan!

Now on to some ideas for the coming near term environment.  We have a list of some stocks that are of interest and may turn into SRP related swing positions or other soon!

XRS- Tal Education Group-  K-12 Chinese provider of tutorial and educational services. May finally be coming out of a slumber stock wise.  We have covered it at SRP in the past.

IPHI- Semiconductor manufacturer breaking out

PCRX- Pacira Pharmaceuticals, breaking out of a multi month base it looks like. The company’s current emphasis is the development of non-opioid products for postsurgical pain control, and its lead product, EXPAREL, was commercially launched in the United States in April 2012. EXPAREL and two other products have utilized the Pacira proprietary product delivery technology DepoFoam, a unique platform that encapsulates drugs without altering their molecular structure and then releases them over a desired period of time. Some are calling it a miracle drug and delivery system platform.  A break over 110 would be pretty bullish long term.

PRXL-  A move over 65 would break this one out. We have covered it in the past. a Biopharmaceutical outsourcing services company, provides clinical research, clinical logistics, medical communications, consulting, commercialization, and advanced technology products and services for pharmaceutical, biotechnology, and medical device industries worldwide.

AKRX- Generic Drug maker we have also recently had on weekend lists

RJET (On last weeks list, rallied big with airline stocks)

BIN- Progressive Waste Solutions- New uptrend?

ULTA- Ulta Beauty supply, we profited from this at SRP not long ago in a swing position, looks like a breakout as they expand into more stores nationwide.

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Weekend Stock Market Report- Rotation?

This weekends report will be short and sweet, but somewhat to the point.  We had mentioned multiple times over the days leading up to January trading that beware of the first few weeks of the new year.  The market tends to be very volatile and for sure surprises on the upside and downside for individual stocks are the norm.  If you think about it, it makes sense right?  Lots of investors both small and as large as institutions held off on selling stocks in order to postpone taxes into 2016 from 2014 or prior years gains even.  Also there is rotation into the beat up stocks that sold off in November and December as tax losses.  These names would be in Gold and Silver and Energy as we also discussed in recent weekend reports as likely January  bounce candidates.

Sure enough this past few days already has seen gyrations and some that come out of left field.  We can point to one stock Lifelock, (LOCK) that got totally hammered on Friday whereas a few days prior the stock was breaking out to 52 week highs.  We couldn’t find any news of note on Lifelock on Friday to explain the massive selling, so it must be institutions unloading shares on the first trading day of the new year, and that was then triggering alot of retail stop losses, margin calls, and then more selling.  Otherwise, we don’t have an explanation.

Be prepare for more of that possible in the next few weeks with various sectors and names.  Chip stocks for example look ripe for a strong correction, so we are avoiding those right now even though they have 5-6 week bases that appear attractive, we wonder on our end of those are not bull traps.  Gold stocks were all strong this past week as they were really beaten down with tax loss selling into year end, but we are not yet on the Gold bull train until we see a close over 1240.

To wit, in reading the latest edition of Investors Business Daily they sounded like they were at a funeral.  Let us quote a few phrases from them from the Monday January 5th edition:

Institutional selling is leaving its mark in the market averages and leading stocks. Gains from a rally confirmed in October have diminished for many leaders and a defensive investing posture is warranted. A number of IBD 50 names closed below their 10 week moving decisively for the first time Friday. The market is giving investors few reasons to hold on to stocks, let alone make new purchases. Raising cash and maintaining a fresh watch list are priorities now.

IBD goes on later in the same article with regard to a few names… Apple–  Investors should sell before their recent gains are wiped out.  EPAM systems, same comments (We sold that one a few weeks ago).

Our view fwiw is that we are stock pickers and the market is still healthy.  The issue really is letting the market settle for a few weeks so we can get a better grip on reality and focus on possible sector rotations and avoid some of the tax selling and early year gyrations if possible.  We continue to like select Biotech names like CLDN, CNAT (Which was up 15% on Friday), ONCS, CLDX, CNCE (An SRP special report stock which is on fire the last 10 days), CHRS (Also hit a post IPO high this past week), to name a few.

With that said, at SRP we will update all of our open positions on Monday morning as we always do each day and come up with some short term strategies for our premium members. We may trim a few positions and then add to our watch list as we always do.  Hey, nothing new for us because every week we follow the same mantra.  We build a watch list, we highlight and alert the best names for swing positions, we sell and take profits as we see fit, and we monitor the markets daily.  If you are not a member, join us!

Best of luck to your trading ahead, just beware of the early January waves that can wash you over…

Weekend Stock Market Report $kite $blue $cldn and more!

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WEEKEND REPORT JAN 11 2015

There is so much we can write about this weekend as opposed to last weekend, that we will try not to go too overboard with our thoughts.  We will say to be certain the market is extremely dynamic right now in terms of various sectors going in vastly different directions as we begin the new year of trading.  One thing we warned our premium members about in late December was to prepare for extreme pick up in volatility in early January for the first few weeks, and also to look for a gap fill below in the SP 500 at 2012 area, all of which have come to pass.  Now we may see the dust settle down a bit and below are some of our updated thoughts and some fresh ideas and things to ponder.

In some respects the market is reflecting a virtual up cycle in the economy. For example as wealth builds and interest rates stay low, people buy more houses. Credit requirements have begun to ease up for mortages as well. People go to Home Depot because they bought a house and have work to do on it, more construction workers and skilled laborers go to work. More people go to fast casual and other restaurants pushing those companies earnings and stocks higher. Gas prices plummet causing people to drive further for less money more often, which in turn drives more discretionary spending.  More people go on vacations, go on family ski trips in the winter, stay in hotels and spend more discretionary funds… so the virtual up cycle is often led by the stock market in our opinion, but also works on the downside as we saw in the 2008-09 debacle.

At Stockreversals we have been working mostly in the Biotechnology and Technology areas for quite some time, and to be sure Biotech has been the leader. We were early on in May in identifying CAR-T Biotechnology as a “cancer killer”.  We identified Bluebird Bio back in late May at $23 on stocktwits by saying “All they are doing is killing cancer”, and we were only somewhat tongue in cheek. The stock is at $103 now and has pushed KITE and JUNO to highs as well.  On Friday at SRP we released a fresh stock report on a CAR-T company that is flying way under the radar in the United States, but not for long.  Their patent portfolio alone is probably worth more than their total market cap, plus they have another division of the company non related to CAR-T that you get  virtually for free. In addition, their most recently granted patent may require all companies like Novartis, Kite, Juno, and Bluebird to license their technology for cell editing in the future.  We are excited about this name and we like to be early.

We discussed Celladon with SRP members a few weeks ago and recommended the stock ahead of Cardiovascular Gene Theraphy phase2b results due in April.  We wrote an article and published it this past week as well on SeekingAlpha.com because we think investors should be made aware of the company now, not in 3 months. CLDN is rallied 10% from our article into Friday and we think it could double between now and end of April if all goes well. They are the only Gene Therapy based Biotech to receive Breakthrough Therapy Status from the FDA… stay tuned. We would also point out that 53 million seed round investors included Kleiner Perkins, Novartis, Johnson and Johnson, and Pfizer… good company no?  Follow the smart money…

CHRS which we wrote about in November and December at $13-$14 per share after their IPO is now trading near $22 per share. We said that Biosimilars would be subject of much discussion in 2015. This past week a first Biosimilar in the US was approved and CHRS stock took off.  We like to be early where we can before the rush of investors come in.

We noticed the leading chip stocks also broke to the upside late in the week last week, and we were worried they could possibly break down, which would be bad for the markets. Chip stocks tend to be leading indicators of the technology sector, companies we have covered in the past like NXPI and AVGO all looking strong.

We also had written about Twitter back on December 24th to our free list and also on stocktwits. We felt it was ripe for a 2015 turnaround based on the chart pattern (Triple bottom we outlined on January 4th) and also the sentiment and valuation.  We just saw a huge move late in the past week so far the stock up about 12% from our December 24th brief report.  We think they will figure out how to monetize their audience this year and sentiment will improve.

 

What we are seeing with Biotechs right now early in the year is an explosion in money flow from retail investors, which in turn forces the mutual fund managers to buy more stock in the leading names. This is why you are seeing KITE, BLUE, JUNO etc all moving up.  We had identified BLUE and KITE early on months ago, so the question is where do you look now for the next move in Biotech if at all?

blue srp twits

We think some of the big cap names like Celgene (CELG) and Gilead (GILD) are due to move.  We pointed out the ABC bottom in GILD on stocktwits a few weeks ago near $90, the stock is now $107… but still cheap. On December 24th at $89.45 we posted this on our free blog at stockreversals. com. So again here is another crowd behavioral pattern that we identified amidst the noise on the street. The reality is Gilead has been a technology leader for years and will continue to do so, the stock was woefully oversold and undervalued and hated at the bottom of the C wave, see our post below.  This was the chart on Dec 23rd:  Now its up $18 big ones…. 20% move… 

http://stockreversals.com/2014/12/24/is-gild-bottoming/

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Celgene on the other hand is by far one of the best run companies on the planet hands down. A great growth stock that requires patience to hold, but over the years has rewarded shareholders. What you get is not only a very profitable growth stock in Biotech, but they essentially are a Venture Capital firm with a huge host of partners in various stages of Biotech phase trials and also emerging companies with percentile stakes in the form of stock ownership.  So if you want to buy a biotech and go to sleep, CELG is your man…

Gold stocks also we mentioned in latter December 2014 Weekend Reports as likely to be January beneficiaries of tax selling reverals to the upside. Sure enough, this past week the strongest ETF was the GDX and GDXJ for Gold stocks. With that said, we also mentioned we would wait to see Gold over 1231 on a closing basis before we got active if at all, and its close but not quite there.

Oil we felt  could drop as low as $36 per barrel in US terms, so we have not been active in Energy stocks at this time, go with the trends. Trying to be a bottom picking hero often backfires with lower prices than you expected.

In terms of the stock market as a whole, we do have to be on our toes for a potential double top pattern here in early January.  To be sure, we could be in for some correction period a bit deeper than people are planning. With that said, we are stock pickers and have said in the past that there are always sectors stronger than others, so the work must be done to locate the leaders within those sectors, or find those emerging  companies under the radar a bit early if possible.  Here is a chart of the SP 500 that we would pay attention to:

When the 13 day Moving Average line crosses the 34 Day moving average line (Note those are both Fibonacci numbers) you can get a downside washout.  Right now its close, so just be aware of it. There is also a gap near 1900 that at some point likely closes below… if you have some recent nice profits, you should take some of them.

sr sp 500 111

There are some interesting companies and set ups we are watching for our SRP members near term, some of which may be alerted as Swing Position trades. With these we look for multiple day to as much as 8 week holding periods with defined entries, targets above, and stop on close points.  Here is a list of some we are actively watching:

SONC; TWTR; ALGN; SIMO; ILMN; ZLTQ; CDW; RH; ABC; CELG;

Biotech Breakthrough Stock Report Jan 7th

Celladon’s Cardiovascular Fast Track MYDICAR Candidate Could Make Investors Wealthy- StockReversals.com Jan 7th 2015

Summary

  • Market Capitalization leaves room for a lot of upside.
  • Piper Jaffray believes Cardiovascular Gene Theraphy could explode on scene in 2015.
  • 350,000-525,000 patient population with Breakthrough Therapy Status from FDA.
  • Results from Phase 2b Trial due in April, Company is ramping up production capacity now.

We believe Celladon (NASDAQ:CLDN) has the potential to be a wealth builder for early investors ahead of their April phase 2b data release. The company has been increasing credit lines, setting up manufacturing agreements and running test batches of their MYDICAR ahead of April. The upside in the market cap could be substantial.

CLDN- Celladon $17.35 as of 1/7/2015

Website: http://www.celladon.com/

23 Million Shares Outstanding- 400 million market cap

Balance Sheet: 95 million in cash, burning about 8-9 million per quarter.

Celladon is a clinical-stage biotechnology company applying its technology cardiovascular gene therapy to develop novel therapies for diseases with tremendous unmet medical needs. The company is going after targets such as heart failure, vascular disease, diabetes and neurodegenerative diseases. MYDICAR, the Company’s most advanced product candidate, uses gene therapy to target SERCA2a, which is an enzyme that becomes deficient in patients with advanced heart failure.

Importantly in our opinion, Celladon has received Breakthrough Therapy designation from the FDA for this MYDICAR program and expects to report results from the Phase 2b clinical trial in April 2015. Celladon has also identified a number of potential first-in-class compounds addressing novel targets in diabetes and neurodegenerative diseases with its small molecule platform of SERCA2b modulators. This could greatly expand the application of this Biotechnology to other diseases and therefore upside potential for an expansion of future revenues and market cap increases for shareholders.

In addition, investors should be aware that MYDICAR had previously received Fast Track Status from the FDA. So this designation is now in addition to Fast Track Status. In addition, this was only the third Breakthrough Therapy designation awarded by the Center for Biologics Division of the FDA, and MYDICAR is the first and only gene therapy product candidate granted this designation to date.

What happens with Breakthrough candidates is they can bypass a Phase 3 trial and move straight towards approval, and then the FDA may have them continue safety trials and other studies while allowing the drug or therapy to be used in patients.

In order to understand the potential upside for Celladon we need to look at the market cap relative to the potential patient population for starters. The high unmet medical need of systolic heart patients at stage 3 and 4 of the disease entails currently 350,000 patients according to conference call notes from the company recently. This is in comparison to significantly lower numbers of patient population for biotech companies with much higher market capitalizations. Often “rare and unmet medical needs” approvals by the FDA can still cause the market cap of a Biotech to soar, even though the patient population may be fraction of that for CLDN.

The market cap for Celladon today is only 400 Million. The market cap for Biotechnology immunotherapy darling BlueBird Bio (NASDAQ:BLUE) is 2.5 Billion and back in early May prior to phase 1 data releases, their market cap was around 600 million. Though Bluebird Bio has seen early success in terms of response rates for soft-tissue cell related cancers or blood cancers, these are not typically single dose regimens and likely that each patient will need an individual treatment regiment that is different from the next patient, causing more expense and further delays in treatment. However, the excitement of high response rates is what has driven the market cap so high in their case. We think CLDN could see a large move up in their market valuation given the large patient population and the high unmet medical need that cardiovascular disease represents.

Cardiovascular disease effects some 6 million Americans per year according to the American Heart Association and Systolic heart failure is responsible for a significant percentage of hospitalized stays, causing healthcare costs to rise substantially in these cases. Celladon’s gene therapy using MYDICAR aims in a single dose to reduce dramatically the length of hospital stays as well as further recurrence. In the Phase 1 trial they showed 35 of 39 patients with a positive response rate. In Phase 2 the aim is to work with 250 patients and achieve an endpoint of a 45% response rate, less than 1/2 that of Phase 1. The risks obviously are that they come up short in terms of the response rates and the endpoint of the study and have to go back to the drawing board.

CLDN recently doubled from $9 over the last several months likely based on the above breakthrough FDA news and also the recognition that genetic based solutions for Heart disease could be a massive breakthrough and possibly give CLDN a market cap increase that could reward early shareholders in our opinion. It appears that executives at Celladon are feeling fairly confident based on recent corporate actions. To wit, the company is already working on a manufacturing facility in New Hampshire in anticipating of needing to produce MYDICAR going forward. They hired a new position in august for Vice President of Commercial Planning. Celladon just announced they completed a commercial quality test batch run of MYDICAR at a second facility with a manufacturing partner. We suspect they are preparing for an eventual launch of this gene therapy.

Revenues: In an October 13th research report, Credit Suisse indicates they expect upon approval that MYDICAR dosages would be $36,000 in the US and $23,000 in the E.U. With a 350,000 patient population in the US alone not counting the E.U. the revenue potential upon an approval is well north of 1 Billion. This does not take into account the rest of their pipeline or other indications.

Catalysts: Celladon enrolled 250 patients in February 2014 in the current CUPID 2 trial. The company believes they can have data to unblind and report top line results from this trial in April 2015, just a few months away. Obviously that would be the catalyst if the 45% endpoint is met for potentially much higher valuations. Biotech’s as most investors know move quickly on data points as they are released.

What we find interesting in digging through materials is the following points. Phase 1 CUPID trial had only 39 patients, and this one has 250.The endpoint is the key, and it looks like a low hurdle to jumpwhich could then directly bypass (Pun intended) a phase 3 requirement due to Breakthrough status. In the CUPID 1 trial, the 1 year data showed hazard ratio 0.12; Risk reduction 88%, p=0.003. In Phase II the primary end point is Risk reduction of 45%, HR 0.55. So they have a very good shot at being able to clear those hurdles in our opinion with only a 45% level to climb whereas they hit 88% in phase 1.

Interestingly , this is what the CEO Krisztina Zsebo said in the August conference call:

we believe that depending on strength of the CUPID 2 data, there is a possibility that the FDA may not require us to complete additional efficacy trials of MYDICAR for the treatment of systolic heart failure, if the result of our ongoing CUPID 2 trial satisfy FDA’s requirement under this new breakthrough therapy regime.

Further to the CUPID 2 trial, the company is initiating phase 1 and 2 Plasma exchange trials to see if they can adjust the anti-bodies for patients and therefore open up MYDICAR to even more population of patients. The CEO indicates this would move the patient population target to 525,000 from 350,000 currently. Data would come out probably in latter 2015. If successful, this procedure can effectively remove the presence of these antibodies for a certain period of time, in which in turn would allow additional patients to receive MYDICAR treatment.

But it does not end there, using their same MYDICAR technology/treatment protocol, Celladon is going after the Dialysis patient population as well in new studies. As many as 25% of hospital admissions in the dialysis population have been attributed to vascular access problem including fistula malfunction and thrombosis. Celladon believes MYDICAR maybe able to prevent these blockages and improve success rates for these procedures. There is a very high unmet need here as there are currently no FDA approved product to enhance AVF maturation.

Pending completion of additional preclinical work and approval by the FDA, they expect to initiate a clinical trial to evaluate MYDICAR’s effect on improving blood flow in treated vessels and functional use of the fistula for hemodialysis. Initial results are expected in 2015.

Finally, Celladon does not stop there as they are in-licensing stem cell therapy technology to test it’s effect on myocardial infarction after successful results at Mount Sinai in Animals.

The CEO goes on:

We believe Celladon today is in excellent position to execute on our vision and goal. And MYDICAR program for heart failure continues to progress. And we look forward to upcoming data in April. We continue to demonstrate the broad therapeutic potentials of MYDICAR by rapidly expanding into other therapeutic indications with this product. We are excited about our recent strategic licensing of a truly novel and innovating gene therapy asset, expanding our pipeline beyond SERCA enzymes.

We were early on in pointing out the CAR-T technologies currently all the rage in the stock market as we had recommended BLUE at $23 in late May to our subscribers and KITE at $35 in October. Those stocks have quadrupled and doubled respectively as investors have caught on. The issue though with CAR-T is that the patient population is somewhat unknown, these are blood cancer related treatments which may be difficult to duplicate and expensive. In addition, there are not clear long term known effects of CAR-T following treatment, nor is it known if any further treatments would be required. In the case of the MYDICAR protocol, its a single dose regimen at this point in time according to the studies already completed and the phase2b ongoing trial.

As we have stated, the potential market in the US alone is 350,000 patients that meet the criteria. We are not the only firm noticing the upside potential for Gene Therapy for Cardiovascular conditions, as we noted the highly thought of Piper Jaffray Biotech Analyst, Joseph Schimmer in his top 15 Biotech Breakthroughs for 2015 has Gene Therapy for heart patients as #2. He also has been an early and big fan of BlueBird Bio as we were just for reference.

In summary, this phase2b data should be released in April at some point and if positive and the 45% hurdle is met in the Phase2b trial, we expect a rapid response from the market and a quick revaluation of the market capitalization to much higher than the current 400 Million level in our opinion.

The stock is extremely volatile and subject to swings as much as 15-20% within days both on the upside and the downside. Our work at Stockreversals.com is to look for the under the radar Biotech companies , continue our due diligence, establish initial positions and then continue to add to those positions on volatile downside movements. For what it’s worth, we have included a current weekly chart below with our trend analysis. The recent pullback this week from $20.50 to $16.40 in just a few trading days we think is an anomaly and will not last. We are aggressive buyers of this drop this week.

(click to enlarge)

 

Additional disclosure: We like to establish initial positions in our favorite Biotechnology names and then continue our due diligence as trials continue. If there are large dips in the stock price which is common, we add to our positions. We also sometimes trade around a core position in order to reduce our net cost basis.

Biotech Stock Updates and More

SR- Recent Stock Report Updates + Weekend Report

WEEKEND REPORT LINK

CHRS- We recommended investors buy Coherus a few weeks ago under the IPO price when it was trading around $13.10.  The stock has soared to as high as near $17 this past week for a nice 25% gain for those of you who followed our advice.  Coherus is a Biotech that we like for 2015 due to them being a pure play in the Biosimilars area of medicine.  They basically mimic the chemistry make up of popular drugs and then run them through trials and they have 3 in Phase 3 right now. The 3 drugs they are going after had 14 Billion in sales in 2014.  Some of the worlds top bio investors own the stock and bought more on the $14 IPO.

CNCE-  Concert Pharmaceuticals we recently E-mailed you about and it has since ran up another 15% to near $14 from $12.20 the time of our write up.  They are working on “Dueterated” versions of existing drugs with current partners JAZZ, AVNR (Just bought out), and CELG.  Big names in the drug industry want to find ways to make their high selling drugs last longer and with more strength, less risk, less dosage.  That is what Concert specializes in, and we see them emerging as a growth stock and probably bought out before 1-2 years go by.

ONCS- Oncosec Medical.  This Biotech is working in the combinatorial immunotherapy sector of Biotech. We like the fact that their Chief Medical Officer has 50 published and peer reviewed papers on the subject to which they are attacking and he left Merck to join them 12 months ago.  They are currently in a phase2b trial with a Merck drug that they believe they can increase the efficacy and response rate on by combining with ONCS technology.  Previous work in various trials says this will be the case. We think if the Phase 2 b trial is successful the stock will quadruple if not more… its only a 100 million market cap. We own it at 44 cents as 2% of our portfolio.  One to watch in 2015.  It ran up from 43 to 50 in the week or so following our E-mail on it, and now back near 46.  We think it can reach $2.00 in 2015 possibly.

OREX- We wrote about them in May and we continue to think they have the best obesity drug on the market and will take share and the stock will soar in 2015. End of story… we own it from low 5’s.

BLUE we recommended at $23 in late May its now $93…. KITE we recommended in October at $33 its now $63.  When we see a Biotech that is doing things others are not and under the radar, we get long and we write about them. CNAT is also up 15% on Friday and we have been pounding the table on that one from $6.50 and onward since the summer.

CNAT- Data is due out in January, we have written extensively on CNAT and we own it since June, and we last added in the low 6’s.  Its now 8.25.  Data points are coming on Thursday this week. Our target has been $12-$19

Our favorite Biotech right now besides ONCS is probably CLDN at $20 per share, we think it may see $80 this year once their Phase2b Cardiovascular data comes out in April…. SRP members have a full report on it. Join us to get it free.

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Weekend Market and Stock Research Ideas 12/27/14

A classic 8 fibonacci day reversal on CHRS hit for 18% for our Twits followers:

twits chrs

Another week with a record close on the major indexes.  We have the SP 500 getting to 2131-2138 as our interim pivot resistance forecast, same number we had out several weeks ago.  The recent pullback to the 1973 area was 38% Fibonacci retracement of the prior 259 point rally from 1820-2079.  We have recovered back to highs just over the prior highs before that correction.

We expect January to see a typical pickup in volume and volatility in the first few weeks. Portfolio managers adjust their holdings, rotation occurs, and the December tax selling losers turn into rapid percentile gain winners. Among them likely to be Energy, Precious Metals, and other beat down sectors.

For now though, it’s pretty obvious the top sectors are Cyber Security, Biotech, Airlines, Retail, Transportation and Chips… so our work at SRP in large part is focused in some of these areas currently. SRP members are enjoying paper gains in the Security sector, the Online payments sector, Online advertising platforms,  Airline leasing, and online streaming arenas to name a few.  We have closed out several profitable swing positions over the past few weeks and plan to have a few new ones near term.

Consider joining us at SRP in order to save valuable research time. We Alerted you with Text, Email, and Posts on all positions we open. We follow up every morning in pre market on all positions and market forecast updates and more. We are available almost 24-7 via Email to premium members, and we do this all for the cost of a few trades a month.  Oh yeah, we also kick the markets butt on a regular basis with less risk… JOIN US!

The key to success as an investor is to keep an open mind and not get too myopic. Recognize the winds of change and go with them as opposed to forcing your biased views on them.  If we can currently focus on some Biotech stocks that are maybe a bit under the radar but in the right sector of Biotech, then that would be our focus as opposed to chasing the hottest names.  Right now a few that come to mind include Oncosec (ONCS) and Celladon (CLDN) just for two quick examples of 2015 Biotechs we think are under the radar now for sure, but that likely hit the spotlights in the coming months (As well as Conatus, Concert, Coherus and others we have written or tweeted or stocktwitted about). We have continued to do alot of reading on T-Cel, CAR-T, and Immunotherapy combinatorial biotech science. We have recommended BLUE, KITE, CLDX, ISIS etc at much lower points on Stocktwits or in Emails since May.  We have been tweeting and stocktwitting about ONCS since 44 about a week ago, up about 7% so far. Not an official SRP play due to the 47 cent penny stock pricing (Expect a reverse split soon by management), but we really like the science and the market cap upside of a possible 8-10 bagger on it.  We also have not written publicly about CLDN but we would urge investors to consider a position in it before April cardiovascular gene therapy phase 2b data is released. This stock is at $19 per share and we wont be shocked to see it at $75-$100 in 12 months if all goes well.

Cyber security is at the top of the list as well.  Recently we have swing traded QLYS which just hit 52 week highs and also we recommended VDSI this past week which is up 7-8% already for us quickly. Airlines are another focus and we have a few on the weekend list, and we just saw Virgin Airlines soar to highs this past week POST IPO.

At any rate, its an exciting time to be an investor and this near 6 year bull market is one for the record books, but looks like the SP 500 will work to attack our 2181 target in the Winter 2015 if we are right before perhaps a larger spring-summer correction. One day at a time.

In the meantime, here are some symbols to hit our watch and potential near term alert list for further study:

EMC-  Obvious technology large cap name whose shares are close to running to 52 week highs

ATE-  Advantes is a chip stock that is just now hitting 52 week highs but under the radar

AFFX- The list of owners of this stock reads like a who is who.  Are they finally going to live up to their promise? Affymetrix, Inc. provides life science tools and molecular diagnostic products that enable parallel analysis of biological systems at the gene, protein, and cell level primarily in the United States, Europe, Latin America, and Asia. The stock looks healthy.

NOAH-  The chinese wealth manager that to be honest we have been skeptical about for awhile. However, with the recent appointment of a former Goldman Sachs higher up to a top position, and the opening up of some Chinese exchanges… their time may have come.

NXPI-  This has been in a quiet base near highs. This chip maker benefits from the rush to online mobile payments and more. 8 week base likely breaks out soon.

FB-  Facebook once again looks poised to finally break out of a 6 month base

ALK-  Alaska air in the Airline group is perhaps one of the best run airlines and with strong growth profile and reasonable PE ratio.  This chart looks poised to breakout soon.

SPR- Spirit Aerosystems is a “Plumber” if you will of the Airline group, they provide the equipment and systems. Reasonable PE, nice chart… underfollowed.  We don’t know a thing about struts and pylons, but they are making money with them. 9 week base too.

RJET-  Another regional airline run by Republic airlines. Nice 10 week base pattern that could breakout soon. PE 10.

MTOR- Meritor produces integrated systems and components for OEM’s in the auto industry, which by the way is also on fire. 6 week base, PE 15, good growth recently.

CLDN-  Celladon is a leader in Cardiovascular Gene therapy targeting Systolic heart failure subset of the heart disease population. Phase 1 data had an 88% response rate, they were granted both FDA Breakthrough therapy designation and fast track status for Phase 2 currently underway with 250 patients. We are long from 17.43. With a 400 million market cap we can see this one at multiples of this valuation if all goes well.

We are not yet buyers of Gold stocks and we may miss the bottom. However as we have espoused here many times, until GOLD takes out 1240 on a closing basis these are just short term scalp trading stocks and there is no point in wasting our time or energy on them just yet… but they remain on watch.

Beware the reckless trader, which are you?

How long until you blow up your account?

You must ask yourself 5 questions before you position yourself into a trade, a scalp, a swing position, or a long term position.

1.  What is my position size going to be relative to my risk assets?

2.   What is my risk tolerance

3.  What is my threshold for pain

4.  How will I react to a paper loss of what proportion (Draw down)?

5.  What is my time frame?

Are you a reckless trader or a risk manager?  Are you a throw it all on black kind of trader? Do you prefer to overweight just a few positions? Do you buy pullbacks or do you buy breakouts? How does it make you feel when your position goes against you quickly? Do you go all in or do you average your way in?  Do you scale out of winning positions or let the entire share count ride?  Do you average up or average down? Do you use margin or options?

Do you understand your psychological makeup and profile?  Are you aware of your weaknesses, not just your strengths as an investor or trader?  How much time do you spend and are you actually beating the market or just foooling yourself that you are, or might, or hope to?

Do you secretly wish to blow up your account?

Do you know the difference between a computer generated cascading waterfall drop in a stock that you should buy and one you should sell, or one you should just do nothing with?  We do… Can you differential between a 10% loss that is temporary that you should add to, and one you should sell and or not add to?

 

sr cldn sample

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Can and do you read the IPO prospectus on file with the SEC and do you know what to look for?

You know what makes someone and expert trader and investor?  A ton of money losing mistakes over many years and still surviving with capital to invest.

We are experts and we try to help people with all of the issues mentioned above.  The reason we are experts is we lost a truck ton of money making stupid mistakes in the markets.  We made fortunes and gave them all back a few times round trip.  We took $7,000 and turned it into $1,000,000 in an IRA account in 7 years with no margin and no options back in the 1990’s.  We gave it all back… We turned $200,000 into $1.3 Million in 7 months with no margin in the year 2003 and gave it all back.

So why would you bother reading our scribble and our advice?  Because we are experts and we can probably save your capital and your marriage.  We learned all the stupid things that a trader should not do because we did them all, and then some… and lived to tell the tale.  We had a come to Jesus meeting with the market and we learned respect for the market… have you?  We crush the market all the time now with LESS risk, no margin, no options and in less time and with less capital at risk than 95% of traders… and we do it because we lived to tell the tale.

Are you still looking every single day for the next hot trade and stock that is moving? Do you chase performance only to give it all back quickly?  Do you sell when a stock drops 7% because you read that in a magazine somewhere and then watch your stock go up 30% 2 weeks later?

Do you double down trying to make back a 10% loss and then lose another 20% and now your account is down 30%?

Yeah… we know… we did it, and we are now experts.

Join us… save some time, save some mistakes… make some money…

… but answer those questions… and look yourself in the mirror before you risk that money ya hear?

The Stock Reversals Team