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ZIOP: Breakout Imminent!

|Includes: Intrexon Corp (XON), ZIOP

What? Yet another post on ZIOP? Seriously???

I can see many readers of my blog rolling their collective eyes and throwing up their arms in exasperation and exclaiming: "Show us the friggin' money, karim!"

Well…I have some good news...

The Fat Lady is on the stage, clearing her throat and about to belt out a ZIOP tune...

Oh my God...she just winked at me! ;)

If there is one thing that readers of my blog know for certain, it is my absolute conviction in ZIOPHARM Oncology's technology and therefore the incredible value and potential its shares represent as an investment…However, since my first post on the company on January 26th, 2015 when ZIOP shares were trading @ $7.24, an investment in ZIOP would only have yielded about 50% in the 10 months since I first sang its praise, which, even though quite respectable, is nowhere close to what I believe the investment will yield in the near term (1-3 months). And longer term (1-2 years), by at least an order of magnitude (10X)…Notice that I have used the word "will" and not the word, "should," in the last sentence and thereby closing myself an "out" just in case my prediction does not go the way I expect it to…This should give you all an idea of my level of confidence…Longer term, the only thing that will hold back ZIOP from reaching its full potential is if the company gets sold to a Big Pharma, as many have speculated is currently in the cards…Personally, I would prefer that it remains independent for at least another 12 months…

In today's post, I will explain why ZIOP stock is technically ready to breakout and breakout BIG…Of course some of you may point out, and correctly, that I also felt the same way two and a half months ago when in my August 6 post, I basically said the same thing…So why would this time be any different?

Two things in particular:

  1. We are past the summer doldrums, when markets traditionally take a breather and in the Fall it usually tends to spring back to life...and in the past week, the US stock market has shown that this year will be no different. In other words, the US stock market is rocking and rolling.
  2. ZIOPHARM Oncology's management is finally ready to share some data with us...and there are quite a few anecdotal pieces of evidence(s), enumerated here at length in a number of previous posts, that leads me to believe that the results are going to be stellar...

What I am about to share with you all is a "technical" roadmap of ZIOP's projected share price trajectory in the next 2-3 months…An almost identical roadmap, for another stock, was first predicted and shared right here on my blog way back in April of 2013…and many regular readers of my blog handsomely profited from that prediction as it followed my roadmap to a T and of course that move also helped me take my $10,000 public portfolio, shared here with everyone in realtime, to more than a $1 million in just 5 months… :) That previous stock's trajectory and ZIOP's projected trajectory are so uncannily similar that when I first noticed it, I could not believe my eyes...I am so confident in my prediction of ZIOP's upcoming move that I am willing to bet my reputation on it!*

But before I present my "technical" case, there is one overriding assumption that needs to be highlighted, especially for those new to my blog: In the biotechnology sector, Immuno-Oncology is the most exciting sub-sector because it brings us the promise, unimaginable just a few years ago, that we may finally win our war on cancer, and that too, relatively soon..Considering that billions of dollars are spent yearly, treating millions afflicted with this dreaded disease, winning this long fought war will be a major celebration for mankind. We all can look forward to the day in the not too distant future when receiving a cancer diagnosis will no longer mean to have to carry the heavy burden of preparing for death…This is truly a very BIG deal and needless to say, should save the world economy countless billions of dollars spent treating those with the disease, and sadly, many times, unsuccessfully…Of course, those companies that help us win this war, will reap billions as well…and readers of my blog know that I am absolutely convinced that one such company will be ZIOPHARM Oncology.

Now let's talk technicals…

For those new to my blog or to technical chart reading, I will first explain how I read the health of a stock, using technical charts...

a) I use Point and Figure <PNF> and Candlestick charts in reading a stock's technical tea leaves.

b) A stock's daily chart is akin to being "inside" the forest; its weekly chart allows me to view the forest from a distance and finally a monthly chart gives the view of the forest high up from the air. Today, I will only discuss the daily and weekly charts.

c) When using PnF charts, the red line shown on the chart is called the Bearish Resistance Line (BRL) and the blue line is called the Bullish Support Line (NYSE:BSL).

Stocks trading below their BRL means that they are either in a consolidation pattern or in a downright bearish pattern…Once the stock breaks through its BRL, the line actually disappears and is replaced by the BSL, and placed below the stock's recent lows. On a stock's PnF chart when you see a stock trading above its BSL, it basically means that the stock has gone on the "offense" and should go up in price. A break of the BRL can result in a very powerful up move…especially if the stock has been bumping against its BRL a number of times, like ZIOP has been for the last 2+ months.

d) A triangle formation of a stock's price action on its PnF chart means that there is indecisiveness between buyers and sellers and that indecisiveness will get resolved by either the stock breaking to the downside (bearish), or to the upside (bullish). Either way, the move is usually quite powerful. According to Thomas Dorsey, a world renowned expert on Point and Figure charting, in order for the formation to qualify as a "Triangle," it must have 5 vertical columns.

Here is ZIOP's Daily PnF Chart:

As can be seen in this chart, back in December ZIOP started to form a Triangle pattern, but midway through its formation, it suffered a short breakdown…but then recovered and eventually broke out, going from $3.50 to $14+ in 3 short months and rewarding its owners a 200%+ return!

Today, ZIOP's PnF chart has formed an almost textbook perfect Triangle Formation, with the requisite 5 vertical columns…in fact, this new triangle looks a heck of a lot more beautiful than the one from last December…and just like last time, it is again bumping its head against its downward sloping BRL…

Last December, when ZIOP broke through its BRL, it eventually made a 24 box move. When ZIOP breaks through its BRL this time around, and should it make a similar 24 box move, then its projected price would reach $24! BTW, there is absolutely no doubt in my mind that ZIOP will break its BRL…the only question is when?

I strongly believe that it will do so this week, but certainly by next week!

Now let me share the roadmap that my previous pick followed back in April 2013…On April 23rd, 2013 I wrote a post titled: The Reasons Behind My Big Bet On SunPower

And then just 2 days later, on April 25th, 2013, I wrote a follow up: SunPower's Stock Stages A Major Breakout!

Should anyone care to read those two, above referenced posts, they will see the uncannily similar chart patterns of SPWR and ZIOP along with SPWR's and ZIOP's identical price targets for breaking their respective BRLs :

  1. Just as ZIOP's stock price is currently sitting in Os on its PnF chart, back in April 2013, SPWR's stock price was also sitting in Os!
  2. In April 2013, in order for SPWR's PnF chart to switch back into Xs, it needed to print $11.50…today, ZIOP too needs to print $11.50 to switch back into Xs!
  3. Back in April 2013, SPWR had to print $12 to break a double top and convincingly break through its BRL, so too will ZIOP to accomplish the same feat!
  4. In 2013, I had predicted that SPWR will reach my price target of $23…this time around, and based on ZIOP's 24 box move in December 2014, my price target for ZIOP is $24…The only caveat being that with SPWR, it was easier to set a price target because it had a previous resistance at $23…In ZIOP's case, being that the stock has never even printed $15, let alone $20+, therefore, with my $24 price target, I am relying mostly on guesswork…even though there is some logic to my guesswork...

Now I will share my read of ZIOP's weekly PnF chart and compare it with that of its 2 more well-known competitors in the immuno-oncology space, namely JUNO and KITE …As I had mentioned earlier, looking at a stock's daily chart is similar to being inside a forest while its weekly chart gives one a view from a distance and therefore a much better perspective. I also pointed out that it is important to note whether a stock's price is below its BRL (bearish) or above its BSL (bullish)…

Here are the weekly PnF charts of JUNO, KITE and ZIOP:

As can be seen from these charts, only ZIOP is above its Bullish Support Line while both JUNO and KITE are languishing below their respective Bearish Resistance Lines. It is quite clear, at least to me, that the market is telegraphing it's bullishness for ZIOP and not for JUNO or KITE...Though KITE seems to be showing some signs of life with its weekly PnF chart getting ready to attack its BRL...

Finally, after 10 long months that saw ZIOP's share price go up to $14+, and then all the way down into the $7s, the time has finally arrived for it to make a solid move back up to its March highs and then breakout, convincingly(!!!), and make a new all-time high somewhere in the $20s...The upcoming ride is going to be a real can count on it!

ZIOP to the Moon, Alice!


* The only caveat I will add is that if there was to be a cataclysmic event or an unforeseen and tragic accident that affects either XON or ZIOP... :)

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.

Disclosure: I am/we are long HALO, XON, ZIOP.