AMGN (Amgen) Elliott Wave forecast

Trading strategy: We entered long on 31-Oct-2005 at 75.96. Since then the stock went down to 73.84 and then closed at 79.19 at the end of the week. 1. Move stop loss to break even at 75.96. Leave take profit at 99.90. 2. When the price moves below 72.37 resistance, enter short at 72.30 withthe stop loss 73.20 and profit target 58.0. 3. Follow the market and define which scenario is in development. 4. If the market hits the stop loss, we will update the trading plan. Amgen outlook: The outlook for this stock has not much changed since last weekend. Perhaps bullish scenarios have become more probable. However, the price is still in the high probability range of the correction wave 2 of the inverted impulse and it may go down in the nearest future. Although the price is already outside the high probability time range for correction wave 2, it still potentially has about two months to complete.

AA (Alcoa) Elliott forecast

AA (Alcoa) trading strategy Seek an opportunity to enter long. Place stop loss at 22.15 (if price reaches this point, it means that the current outlook is totally wrong). You may also try to enter long at open, although the potential drawdown could be more than 10%. Profit Target at 39.40.AA Outlook Long term: Currently AA is in the incomplete Wave II of the Grand Super-cycle degree Impulse which is expected to complete in the price range .7 to 39.85, but more probably between 20.5 and 35.8. This wave is due to complete anytime from now until 05-Sep-2063, but is most likely to complete before 26-Dec-2008. After this wave II is complete, expect the market to continue up into wave III. Wave III should always be an Impulse and should retracewave II completely. Expect wave III to retrace wave II by 164% - 383%. Medium Term: Wave (b) of the Super-cycle degree Flat is expected to complete in the price range 36.72 to 90.93, but more probably between 37.28 and 51.6. This wave was expected to complete before 04-Jun-2004, and must complete by 24-Jan-2012. After wave (b) is complete, expect the market to continue down into wave (c), which should be a five wave Impulsive pattern. Short term: Wave (c) of the inverted Flat is expected to complete in the price range 26.42 to 69.64, but more probably between 36.62 and 56.07. This wave is most likely to complete sometime between 26-Dec-2005 and 22-Dec-2006 Note that it cannot complete until 05-Dec-2005 but must complete by 21-Aug-2009. This wave will also complete Wave (b) of the Super-cycle degree Flat and afterwards the market will move down in the impulsive wave, which would accomplish the current correction. Although the outlook for the next few months is bullish, there is an uncertainty for the very short time frame of several days up to two weeks. The stock price may continue to rise higher, however the price follows the upper Bollinger band and oscillators show that AA is probably in the overbought range. This means that soft range correction to 24-25 is possible at any moment. If you decide to buy at open, the potential drawdown may develop to 22.30 (if this outlook is correct).

Is Dendreon worth more without Provenge?

This is perhaps a startling thought to many people. But while I do find it provocative, it is perhaps not very far-fetched and has its merits. Of course, if one believes that Provenge is a guaranteed blockbuster than the thought is simply absurd. But if one takes what I consider a more realistic view that the path to Provenge’s success is extremely difficult then, perhaps, getting rid of Provenge is not such a bad idea. Dendreon is burning close to 100 million dollars per year, with most of the money going to Provenge clinical trials, building manufacturing facilities for Provenge, preparing the sales force for Provenge, etc. Provenge, Provenge, Provenge – everything else seems to be on the back burner. While the company still has cash at the moment, it is running out of it fast. In fact, the money will have to be raised sometime in 2006, before or soon after the launch of Provenge. Dendreon will likely to be starving for cash till 2008 before the money from the Provenge sales may start trickling down. And what if the trickle is very meager? Two-three years from now new cheaper drugs could well outcompete Provenge and reduce it to a fancy expensive drug with limited patient base. There are several competitors that could bring their drugs relatively soon after Provenge hits the market. Prostvac-VF from Therion, GVAX from Cell Genesys (CEGE), and DN-101 from Novacea come to mind. While these drugs are likely to be approved after Provenge, they will most likely be much cheaper to produce because they are not custom-manufactured for each patient. With so many drugs targeting the prostate cancer, the ability of a company to deliver drugs that are competitive price-wise could be the most critical for winning a substantial share of the market. I would go as far as to suggest that the scenario according to which Provenge is not even able to pay for the cost of its own development is quite likely. At the same time, the cash that Dendreon has now could be used to more speedily pursue highly promising Trp8 inhibitors that are currently in the pre-clinical development. ~130M in cash is large enough to push Trp8 program well into phase II clinical trials. It may be unfortunate that the money will be spent on Provenge, a possible money sink with no meaningful return to the shareholders. DNDN should continue to produce good setup for the short-term trader but it may not be such a great play for the long-term investor.

Update: GERN, MEDX positions closed

MEDX open long Oct 28 @8.22, closed Nov 4 @9.30, profit 13.1% GERN open long Oct 28 @8.74, closed Nov 4 @9.05, profit 3.5% Profit calculations do not include commissions and slippage.

Closing MEDX and GERN

Exiting MEDX and GERN positions at the open Nov 4th.

How soon will we see antagomirs in the clinic? Is Alnylam a Buy?

Are antagomirs the best compounds that could be practical for treating multiple human diseases? Could companies like Alnylam (ALNY) initiate first clinical trials using antagomirs relatively soon? I believe the answers to both questions are yes. The paper published a couple of days ago by the scientists from Alnylam, the Rockefeller, and NY University (see the abstract below) provides perhaps the most convincing evidence from animal studies that RNAi-related approaches could be practical for treating multiple human diseases. While the experiments were done in mice, there is little doubt that the approach could be tailored to humans. Two points in the paper are critical. First, there is very specific and potent inhibition of the targeted miRNAs. Second, the application of the “drug”, antagomir, delivered via simple intravenous injection, affected most tissues in the animals. Both the amounts of antagomirs introduced and the delivery method (intravenous injection) are likely feasible for humans. When could the first clinical trials be initiated in humans? Now that there is an antagomir tool to knock down miRNAs, what we need are target miRNAs that could be involved in human diseases. While there are many protein coding genes known or suspected to be involved in various diseases, almost nothing is known about miRNAs in this respect. But, this is going to change were quickly via research in the academia and the industry. There are already examples of miRNAs implicated in cancer. For instance, miRNA let-7 is a suspected tumor suppressor. Knocking out a tumor suppressor won’t stop cancer. So other miRNAs that are required for cancer survival and not cancer suppression are needed. I am sure the research to locate such miRNAs is in high gear already. We will probably see the first clinical trials using antigomirs in the 1-2 years. Simple calculation shows that the antagomir dose used on mice (80 mg/kg) translates to about 6 g/injection for an adult person. Now, with 6 g/dose what could be the price tag to synthesize compounds like antagomirs? Antagomir synthesis is essentially the same as synthesis of modified RNA oligonucleotides. My estimates are that antagomirs could cost around 1000$/g or 6,000$/dose for humans. So, even if the drug’s effect could last around a month like in mice, the medicine is still pricey. Of course, the price should come down as the scale of the synthesis is increased but I still see the expensive price of synthesis as a potential problem for commercialization of antagomir-base therapies. Nature. 2005 Oct 30; [Epub ahead of print] Silencing of microRNAs in vivo with 'antagomirs' Krutzfeldt J, Rajewsky N, Braich R, Rajeev KG, Tuschl T, Manoharan M, Stoffel M.Laboratory of Metabolic Diseases, The Rockefeller University, 1230 York Avenue,New York, New York 10021, USA. MicroRNAs (miRNAs) are an abundant class of non-coding RNAs that are believed tobe important in many biological processes through regulation of gene expression.The precise molecular function of miRNAs in mammals is largely unknown and abetter understanding will require loss-of-function studies in vivo. Here we showthat a novel class of chemically engineered oligonucleotides, termed'antagomirs', are efficient and specific silencers of endogenous miRNAs in mice.Intravenous administration of antagomirs against miR-16, miR-122, miR-192 andmiR-194 resulted in a marked reduction of corresponding miRNA levels in liver,lung, kidney, heart, intestine, fat, skin, bone marrow, muscle, ovaries andadrenals. The silencing of endogenous miRNAs by this novel method is specific,efficient and long-lasting. The biological significance of silencing miRNAs withthe use of antagomirs was studied for miR-122, an abundant liver-specific miRNA.Gene expression and bioinformatic analysis of messenger RNA fromantagomir-treated animals revealed that the 3' untranslated regions ofupregulated genes are strongly enriched in miR-122 recognition motifs, whereasdownregulated genes are depleted in these motifs. Analysis of the functionalannotation of downregulated genes specifically predicted that cholesterolbiosynthesis genes would be affected by miR-122, and plasma cholesterolmeasurements showed reduced levels in antagomir-122-treated mice. Our findingsshow that antagomirs are powerful tools to silence specific miRNAs in vivo andmay represent a therapeutic strategy for silencing miRNAs in disease. PMID: 16258535 [PubMed - as supplied by publisher]

Buy signals for CEGE (Cell Genesys) and TELK (Telik)

There are buy signals for CEGE and TELK today. Therefore I will add CEGE and TELK to my model Oncology-Biotech portfolio. The portfolio starts with $100,000 on Nov 1st and will eventually contain 5-15 mostly oncology companies. I will monitor the performance of the portfolio and will compare it to benchmark indexes periodically. Buy 1500 shares of CEGE at the open Nov 1st Buy 500 shares of TELK at the open Nov 1st Stop loss for each position -10% of the purchase price.

AMGN (Amgen) forecast using Elliott Waves

This is an example of purely technical analysis. I will add analyses like this to my blog once in a while. The predictions for Amgen here are separate from my Biotech-Oncology model portfolio picks. Consider this forecast as an attempt to develop a trading approach based on the Elliott wave theory. Keep in mind that the future can not be predicted. Be skeptic about any forecasts. Amgen Possible trading strategy Since the outlook is bullish long term and short term (except Scenario 3), the following trading strategy seems reasonable. 1. Enter market at open 31-Oct-2005 (if the price above 72.37). Stop loss 72.30. Take profit 99.90. 2. If the price moves below 72.37 resistance, enter short at 72.30 with the stop loss 73.20 and profit target 58.0. 3. Follow the market and define which scenario is in development. 4. It is important to watch AMGN pattern closely in the next 2-3 days to minimize losses if a long positition is open but Scenario 3 will tend to be the real scenario. Detailed Elliott analysis with description of Scenarios 1 through 3 can be found in the comments.

Two Buy Signals: GERN and MEDX

I will stick to my original plan and will start building my model portfolios on November 1st. But because my system is generating new signals already (I guess that it is not smart enough to figure out that it is still October), I post these two "unofficial" buy signals that came today. Buy GERN and MEDX at the open October 28th, stop loss for both positions -10% of the purchase price. These two positions are not part of my Biotech-Oncology portfolio unless the signal is still valid on November 1st. In that case I will add them in at the corresponding open price on Nov 1st and will make a note in my blog.

Plans

Starting November 1st I plan to present signals from three different trading systems. The first system focuses on Biotechnology Sector with high emphasis on companies developing oncology drugs. The second attempts to predict IBB (iShares Nasdaq Biotechnology). And the third attempts to predict QQQQ (NASDAQ 100 Trust Shares) behavior. While not limited to trading cancer stocks, the first system is heavily biased towards them. Here are examples of the cancer stocks that the system may trade: ABGX AVII CVM ICOS MOGN PRCS ABGX BIOM CYTK IMCL MYGN REGN AEZS BIVN DNA IMGN NEOL SGEN AGEN CEGE DNDN IMMU NERX SPPI ALTH CELG ENMD INGN ONCY SUPG AMGN CEPH EXEL ISIS ONXX TELK ANPI CLN GENZ KOSN OSIP TRGNY APHT CNVX GERN LGNDE OXGN UTHR APPX CRGN GHSI MAXM PCYC VRTX ARIA CRIS GNTA MEDI PDLI XCYT ARQL CRXA GTOP MEDX PGNX XOMA ARRY CTIC GTXI MLNM PHRM ZGEN Disclamer. This Blog is ONLY designed to monitor my trading systems. It is NOT meant to give advice on when to buy or sell certain securities. Use the information found in this blog at your own risk. I am in no way responsible for your decisions in the stock market.

Trying to post something to my Trading System Blog

Hi, I am starting this blog to help me record the results of my stock trading systems. Let's see if anybody will actually read my blog :). Trading Signal