Portfolio 06-21-12 and Analysis

My portfolio as of 06/21/2012:

1. ALIM

EXECUTION

9-month

Event1: I found ALIM in the list of "Unusual volume" on Finviz. A substantial drop a month ago followed by a volume increase without major news suggest someone knew something. <<<I day-traded ALIM because 1. Big loser has to bounce back a bit. (oversold) 2. Volume up with no news. It should have another bounce when news comes out. Even if I got trapped today, I would still have chance to get out when news comes out.>>>

Event2: After 2 months, I set a limit sell order at 2.1 and it was filled when the price increased by 30% one day without news. <<<I closed the position early because it was still in the "rumor" stage. However, it did reduce the risk because my position in ALIM was too high. >>>

EventX: Right after I sold 20%, major news came out that the drug won approval in Europe. I did not sell. <<<Greed took over. I convinced myself I would hold ALIM for the long run. "Buy the rumor, sell the news" is never wrong. Because of the substantial price jump, it has to pull back. Even if I wanted to "invest" in this stock, it was high time I closed the position and waited for a pull back to jump back in.>>>

ANALYSIS

10-week

It sees a spike every time approval news comes out. First approval was the most significant. Approvals are coming in the following countries: France, Germany, Italy and Spain. The stock is due for a spike based on new approvals.

10-day

The stock price levels around 2.75 in the past 10 days. There were little spikes (accumulation pattern based on my experience in JAZZ). Watch for a price decline on low-average volume and pull the trigger.

PLAN

Short term: Add 25% at 2.60±0.03 level or even higher between 06/22-06/27. Company expects to meet FDA this coming week. Depend on the news, exit 30% at 2.95-3.00 level.
Long term: Company awaits good news from EU for approvals and possibly partnership. Possible resolution with FDA. Risk: Dilution of shares by raising capital. This should not come soon.

LESSON LEARNED

Buy the rumor, sell the news.

2. PBIO

 EXECUTION

12-month

E1-3: I first found out about PBIO during literature research for my job. For protein digestion, it is the only one that uses pressure. No direct competition. Very active in local and international meetings. I did one successful swing trade with this low-float stock. At $1 level, I thought it's gonna struggle for a bit. That's why I bought in at 1.01. Low-float makes it really hard to predict. I added tiny amounts in the hopes that it will go back to $1. I failed to exit my positions when I got the chance (blue oval). I convinced myself I was in it for the long run. Once again, greed took over.

E4-6: All three positions were established when the stock was oversold. I almost always bought in at the low of the day. However, I failed again to exit when I had many chances.

ANALYSIS

The price hit 52-week low today at $0.20, but I still have trust in this company. Especially the CEO bought in at $0.8 level. Also the partnership with small companies since April was very positive. These small companies are the "big" names in proteomics sample prep area. The price decline may be due to a lack of interest plus MM manipulation. There is also worry of the debt and stock dilution as the company needs to raise capital for expansion. I think today or tomorrow may be the critical point for a leg up. (hitting low at low volume)

PLAN

PBIO is way oversold at this level. I'm expecting PBIO to gradually ease back to $0.40 level. Considering the risk of a low-float stock and my heavy position, I am not buying more at this level. I will just hold and watch. Plan to sell 33% at $0.60 level.

LESSON LEARNED

Before taking any position, plan the exit and stick to it. Greedy pigs get slaughtered.

3. THQI

 EXECUTION

7-month

E1: I spotted THQI in the Top Losers list in Finviz. I caught the falling knife at $1 expecting for a deadcat bounce above 1, which never happened. Also I thought the good sales of xboxes were somehow linked with THQI, which was not true. <<<Never buy in any stock without homework; know when to cut loss>>>.

ANALYSIS

All gaming companies are not doing well. Pro: This company could be bought out. Sit tight long enough, I believe it will turn around. Con: Cash is very low. Lawsuits are against them. Management seems to be dishonest.

PLAN

Exit position at 0.75-0.8 level. I should have cut loss a month earlier.

LESSON LEARNED

Don't buy without homework. Know when to exit a losing trade.

4. DYN

EXECUTION

8-month

E1: DYN was in the Unusual Volume list on Finviz. There was no news. I bought in at 3.30 and expected a bounce the next day. It then announced bankruptcy. Then the next day after bankruptcy announcement. It reported "transfer of assets" which protected shareholders. I did not sell because I was too greedy to see more upside. DYN then went to gutter since then. I should have cut loss at 1.65 level (50% loss).


ANALYSIS


It is a bankrupted company with fraudulent behavior. That says enough about its credibility. It probably won't turn around for years.


PLAN

Hold till slightly below $1 to cut loss since not much value is left.


LESSON LEARNED

Greedy pigs get slaughtered. When reaching a must-cut-loss point, CUT LOSS right away.

5. AMBS

EXECUTION

11-month

E1: This stock is in the penny stock email. I wanted to try penny stock. On a day of unusually high volume, I did a day trade successfully. It is a "pump n dump" scheme.

ANALYSIS

Penny stock is risky. Need to be quick. I had chance to exit my position but I didn't. Greed!

PLAN

Hold on to it and hope some day it comes popping.

LESSON LEARNED

Penny stock either not to touch or get in and get out quick.