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I used to run a limited partnership, boutique hedge fund in the 90s. Retired in 2000 and moved from New York City to Toronto, Canada, got married, raised a family and basically settled down. After a few years in Toronto, my wife got tired of the city’s 8 months of cold weather and insisted that... More
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  • My Current Focus 9 comments
    Nov 11, 2013 9:23 AM | about stocks: GALE, HALO, RMTI, ASMB, ZIOP

    In response to a number of questions posed by kccase3, I believe a new post that consolidates my answers may better serve all those who follow my blog...

    First and foremost, I want to take the unusual step of posting my usual disclaimer at the beginning of my post to put special emphasis on it...So do please read it in its entirety:

    DISCLAIMER: All postings made here are strictly for my personal record keeping and in no way, shape or form, am I even remotely suggesting others to follow my Buy and Sell moves. Trading options is definitely not for the faint of heart as one's portfolio can move up, or down, anywhere between 10%-30% during a single trading day. Feel free to follow my progress here, but PLEASE do not follow my moves. However, if, in spite of all my exhortations, should you decide to do so, be advised that you, and ONLY YOU will be responsible for any losses that you may suffer...In other words, the onus is strictly on you. On the other hand, if the move(s) result in a profit for you, I am open to discussing a split. ;-)

    Having dispensed with this important disclaimer, let me start by saying that I am an opportunistic options trader and am 100% sector agnostic. Wherever I see an opportunity, I jump on it.

    Eight years ago, when my wife wanted us to move to San Diego from Toronto, Canada, the main reason I agreed to her suggestion was that I would be closer to the biotech epicenter. Unfortunately, the industry 8 years ago was more about future promise than then current reality and a number of companies in which I was invested in were flameouts and I got singed so many times that I decided to seek my fortune in other sectors...

    HALO: About 3 months ago, a dear friend, sent an email asking me to check out Halozyme Therapeutics...Of course, the first thing I did was to look up its PnF chart and the darn thing sang to me...So needless to say, I immediately took a significant position in HALO options and thanked my friend with a box of Godiva chocolates...LOL! Incidentally, on Friday, HALO reached my $13.50 price target and I exited out of my position, at least for now...Here is its most current PnF chart:

    (click to enlarge)

    My introduction to HALO, thanks to my friend, reignited my interest in the biotech sector and today, a significant percentage of my capital is invested in biotech companies and I will share a few here...however, just because I'm now interested in biotechs does not mean that I have lost interest in the solar sector...in fact, that is still my favorite place to play the markets...Solar energy is the future and just by picking a couple of heavyweights there will ensure years of profits for the investor, while biotech's are very risky, but if you stumble upon that rare nugget and bet on it, then the ride can be a lot of fun...

    GALE: One of my favorites is a tiny, little company ($200 million market cap) called Galena Biopharma...Let me share a funny anecdote on how I stumbled upon this company...About 6 weeks ago, another good family friend of ours, Gabe, an anesthesiologist at MD Anderson in Houston, came to visit us in San Diego for the weekend...Over 3 days, he shared with me names of a number of biotech companies that he thought may be of interest to me as potential investments...And one by one, I would look up each comany's PnF chart and not get excited...Gabe, needless to say, was very disappointed that I did not find any one of his suggestions worthy of an investment...

    On his last day with us and just before we were getting ready to take him to the airport for his return trip to Houston, Gabe, disappointed that all of his "hot" investment ideas had failed to ignite an interest decided to throw a Hail Mary pass and mentioned Galena Biopharma (Nasdaq: GALE)...Expecting its PnF chart to be no different, I very reluctantly and perfunctorily, looked up its chart...And lo and behold, I hit pay dirt!

    Without going into the fundamentals of this company, I will share GALE's weekly candlestick chart...and what is most bullish about it is that upon the start of trading on Monday, GALE's 50 week moving average line will pierce through its 200 week moving average line from below...Most folks get excited about the so-called Golden Cross signal when a stock's 50 day moving average line crosses its 200 day moving average line...If that is "Golden" than this signal should be called the Diamond Cross™...LOL!

    (click to enlarge)

    RMTI: Don't have an interesting anecdote to share here, just another company that came on my radar, liked its chart, fundamentals have potential, so I took a position...The stock had a very bullish price action this past Friday and its PnF chart is a beauty and looks ready to breakout...Initial price target price: $16.50

    VTUS: One way I follow an interesting story unfold, especially in the biotech world, is to take a small position in that company's stock (options)...recognizing that having a few dollars on the line forces me to really follow a stock...and that is what I have done here...Should VTUS print $4.00, it will be one heck of a ride...and to ensure that I don't miss that move, I have taken up a small position...

    ZIOP: Here too, my modus operandi is same as VTUS above...The recent weakness in its share price is due to the secondary offering that they just closed a couple of weeks ago...One reason I am bullish on ZIOP's chances is that one of the company's directors, Randal Kirk, spent $10,000,000 of his own money to buy shares in this most recent secondary...and this is after making a similar $10 million purchase back in January 2012, when he purchased his shares for a heck of a lot more ($5.20) than what he paid recently...and Kirk has one heck of a track record in biotech investing...

    One way I sniff out potential investments is to use Deap Throat's "follow the money" game plan...he of course being of Watergate fame...For instance, when I was doing my due diligence on Halozyme, I noticed that one of its directors, Randal Kirk, had made a substantial investment in Halozyme...and when I started looking into Kirk, it led me to Ziop... another name that got me excited about HALO were the Baker Brothers...these 2 brothers run one of the best biotech investment funds in the country...and again, following the money led me to their investment in VTUS...

    Hope the above helps...

    kp

    P.S. I have to commend you, KC, for being such a diligent observer of my postings and am really impressed how good your technical analysis are...keep up the good work...

    Disclosure: I am long GALE, GTAT, HALO, RMTI, SOL, SPWR, VTUS, ZIOP.

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Comments (9)
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  • kccase3
    , contributor
    Comments (35) | Send Message
     
    Thanks for this post KP and thanks for the Props! Learned it all from you. Again, cannot emphasize how much we all appreciate you spreading you knowledge.
    11 Nov 2013, 02:27 PM Reply Like
  • kccase3
    , contributor
    Comments (35) | Send Message
     
    KP-You nailed it with both HALO, GALE, RMTI, and ZIOP!

     

    Like you said, HALO reached its PT at $13.50 and you exited. How did you determine the PT? Based on the high shown in the Weekly Candlestick back in March 2012?

     

    For GALE, the PnF PT is at $6.00, while I can’t really judge the Candlesticks at all. However, the weekly RSI peak in March 2012 was ~78. Are you waiting for it to reach that RSI point to exit? Or all the way to $6.00?

     

    RMTI, you nailed it again. Its heading right up to that $16.50 PT. Is the $16.50 based on the June 2011 peak in the weekly candlesticks?

     

    VTUS, so far has not moved much recently, but I am really hoping for it to move up to $4. If it does hit $4, do you think the ride will be up to $12? $12 is a point of resistance back in first half of 2012. Or if you use the PnF Breakout method to find the PT (and assume it hits $4), the PT would be $7.25. Is this more reasonable?

     

    ZIOP, has been making a move all week as well! Do we see this thing coming back up to $5.50 before it was crushed earlier this year?

     

    If it isn’t clear, I am really trying hard to understand how to set a price target. Haha. PnF really helps on WHEN to BUY, but I am trying to develop my playbook on WHEN to SELL and take profits (hopefully) too. Haha. I am speculating you will say it has a lot to do with experience LOL! As always, please feel free to respond to what you think are helpful questions to the group, and maybe in the future when things slow down (if they ever do for you) a post on price targeting could be in the works  Thanks as always!!!
    15 Nov 2013, 02:06 PM Reply Like
  • Spak007
    , contributor
    Comments (19) | Send Message
     
    Hi KP, just wondering if you have changed your position (short term) on Apple. It has just been floating around between 500ish and 530 and can't seem to gain any momentum. I noticed that you no longer list Apple as one of your holdings in your positions disclosure, have you fully exited? Thanks for your comments!
    20 Nov 2013, 12:38 PM Reply Like
  • invest.beginner
    , contributor
    Comments (88) | Send Message
     
    Spark007, you've got eagle eyes..... thanks. Hope its a typo & he forgot to add AAPL :-)
    20 Nov 2013, 05:32 PM Reply Like
  • kccase3
    , contributor
    Comments (35) | Send Message
     
    KP, GALE is on the run. Do you have a PT? its Weekly RSI has about matched the highest its been in the last three years at a little less than 80. does this indicate a good time to take profits? thanks
    22 Nov 2013, 11:46 AM Reply Like
  • kccase3
    , contributor
    Comments (35) | Send Message
     
    Hi KP, hope you are doing well. It has been a rough couple weeks for the solar sector but a couple of the Biotech names you mentioned have made some great moves. If you end up finding the time, would you mind explaining your focus for 2014? Are we to expect SPWR to consolidate for a while but move upwards at some point in the first part of the year? Are these sale prices we should take advantage of? A print of $27 is a double bottom break and couple be bad news for the stock… your thoughts?

     

    Are GALE, RMTI, RMTI, VTUS and ZIOP fair plays holding April 2014 calls still? Where do you see them going (still upwards for GALE after its recent run?)? GTAT has come back down a bit (presumably after the AAPL hype has died down) and I can’t see anything major in the chart except that it has fallen below its 50 day SMA line.

     

    Any new insights or ideas come your way? As always, thank for your time!
    10 Dec 2013, 03:02 AM Reply Like
  • Options2Wealth
    , contributor
    Comments (97) | Send Message
     
    Author’s reply » Sorry, just catching up with the msgs...GALE, as you correctly observed, got its RSI in nosebleed territory and pulled back...I hope you took some profits...I like RMTI and it is getting ready to pop...VTUS and ZIOP have not given any major signal to pile in, though I do have small positions in them to ensure that I don't miss any signals...SPWR has completed its 8 weeks of consolidation and should be ready to run...However, my big bet is GTAT and it should make a pretty impressive move within the next 3-4 weeks...kp
    17 Dec 2013, 09:08 AM Reply Like
  • kccase3
    , contributor
    Comments (35) | Send Message
     
    I was just messing around and stumbled upon Lattice Semiconductor Corp (LSCC). I haven’t done much research but strictly speaking, the Charts actually look pretty good. Print of $6 would be a double top break out. On a daily basis, the 50 day SMA just recently broke the 200 day SMA and on a weekly basis (golden cross), it looks to be just a matter of time before the same happens (“diamond cross” lol). Any thoughts? Thanks!
    10 Dec 2013, 03:03 AM Reply Like
  • Options2Wealth
    , contributor
    Comments (97) | Send Message
     
    Author’s reply » Good find, KC...I like the charts...Especially the impending Diamond Cross... :-)...I may be a buyer here...will do some dd today...thanks for the heads up...kp
    17 Dec 2013, 09:00 AM Reply Like
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