AOB

[David Randolph]

«American Oriental Bioengineering, Inc. (AOBO.OB). The Group's principal activities are to manufacture and formulate supplemental and medicinal products using proprietary processes. The Group focuses on new product research to combine biotechnology and Chinese medical technology to capture the increasing demand for traditional Chinese medicines and health supplements. The Group owns and operates several plants in addition to a large capacity soybean peptide manufacturing plant. Soybean Peptides are used widely in general food and health food products, sports foods, medicines, the fermentation industry and environmental protection applications. These are easily absorbed by the body and can lower blood pressure and blood fat levels, enhance immunity, lower cholesterol, prevent cardiac and brain blood vessel diseases and inhibit the growth of tumors. During the year the Group acquired Bestkey International Ltd & Harbin Three Bioengineering Limited.»

Look at this company's fundamentals here: Profile for AOBO.OB

P/E Ratio, Cash Flow, Cash in the Bank, Gross Margins, they're all great.

Technically the stock had a big rise over the last couple of weeks:



I personally like this pattern a lot, when a stock is trading sideways, building a base, and then suddenly breaks on the downside with volume above average. But, instead of continuing down, the stock reverses and reenters the accumulation zone. If it wasn't able to break on the downside, made a false breakdown, it is probable that it will end up breaking on the upside.

Of course, the stock is now facing a bit of a resistance for the short term, so there's a possibility of a pullback after my purchase. But think of this: I have sound reasons to believe (technical and fundamental) that AOBO.OB will breakout this resistance. I'm not sure if it breaks right away or if it will pullback on profit taking before it does.

I can't be afraid of profit taking when I have a setup for higher prices. I have to get my position immediately, nevermind if the timing possibly isn't the best. Waiting may prevent me from buying a stock at the short term high, but it also may prevent myself from getting a good and safe profit from the expected breakout in prices.

So I'm not waiting for a pullback, I'm buying AOBO.OB at today's open, 6.66% of the portfolio.

Everyday I will analyze AOBO.OB after the market close until I sell the stock. I always tell I'm going to sell before I actually take action. You just have to follow the answers to this post.

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[eliteG]

This play really looks set to pop.  Check out the breakouts of OBV and Acc/Dis ahead of this move!    nice pick

[Michael]

This will be an exiting day in the never ending story of the fight between the fundamentalists and the chartists.

The stock was under a lot of selling pressure yesterday and the short term outlook seems bearish. The stock is however awesome from a value point of view.

I have put a buy order in at 1.55 (which i see as a support level) and I am hoping that the TA guys will sell out so the value players can take over and continue the run   

We will see!

[David Randolph]

I have my position, altough the stock had a pullback, a pullback that I suspected could be coming. The stock held $1.70, but it is possible it will fall some more in the short term and Michael gets his position at $1.55.

That's not my concern. What I needed was to have a position in a stock that is due to breakout higher and I have that, so I'm satisfied.

[Tirebldr]

Well it pulled back to $1.60. I messed up (waiting for that magic $1.55) and continued waiting and waiting and....

So my question is this now. Do we have a true hammer? Wasn't much of a downtrend (as I understand should occur for a hammer) And if so, might we still have a good buyin Monday morning? On my 1week chart for 60min, CMF shows dropping into the red, A/Distrib has dropped, as has MFI....lShort term??? Long term??

Thinking people want to know?   TIA!

[andyman]

Hi Tirebldr,

Yep, nice share. The chart advanced quite a lot. There where two retracements. The first minor (~25%) the second little more (~50%) with a stronger move up. That looks for me like serious accumulation(to little pullback – that means the persons behind have less patience). But after three advancing legs there should be a little rest. 

Using indicators based on 60min charts may create many false alarms with pennies. It's my opinion, but maybe you have that little extra sense.

One thing confuses me. This company has a book value of 0.88$ per share and positive P/E. The one $ zone is to low for my feeling, of course if the data are correct. They have all four years continuous growing gross profit. This share should be somewhere else, but not between one and two bugs. 

Regards

andyman
 

[David Randolph]

I like to see AOBO.OB closing above $1.7, the last local high. We do have a hammer, no problem with the magnitude of the prior trend, the problem is the low volume. A true hammer should have stronger volume ... anyway, the pattern is still there and AOBO.OB has a bullish medium term trend.

As I wrote on the first analysis, the stock did a false breakdown of the support level, this usually means it will break, this time for real, on the other side of the range, the upper side.

Fundamentals seem very attractive as andyman noted, I don't have enough time now to check the validity of marketwatch.com and yahoo.com numbers, but I will on the next update to AOBO.OB recommendation.

[spalooky]

I bot aobo at near David's price. I like the concept, Chinese medicine. Hey, they've been around awhile. Besides, I work in healthcare in the US and ... need I say more?

[David Randolph]

Thanks for your posts. It still isn't going to be today that I will go deep into AOBO.OB numbers (perhaps Michael is a better man to do that, by the way Michael, did you get your position? Thanks).

If the stock indeed breaks this range on the upside, as I think it will, based on fundamentals and the false support breakdown, the technical target will be $2.48 for the medium term. This technical setup will be triggered with a close above $1.84 with volume above average.

[puerz]

aobo is up 11 cents at 6%. volume is not high though. looks good

[David Randolph]

I don't know how to interpret the short term candles on AOBO.OB. We still didn't have that close above $1.84 that would mean a bullish breakout. But thinking about the technicals and the fundamentals (need to check them, on the weekend I'll have plenty of time to do that) this breakout may come anyday now.

[David Randolph]

$1.84 didn't let AOBO.OB go without a fight. So we've entered a consolidation phase, with support on a closing basis at $1.70 and resistance at $1.84.

As said I believe this stock will break this tight trading range on the upside. I need to have some patience as the stock fights with this medium term resistance level.

[David Randolph]

AOBO.OB is consolidating between $1.70 and $1.84. I think the stock will break higher on $1.84, because the medium term trend is bullish and fundamentals are attractive.

[3puttssuck]

I think you may see the $1.84 soon.

News:

American Oriental Bioengineering's Common Stock Approved for Listing on the American Stock Exchange
Tuesday July 12, 7:10 am ET


BEIJING--(BUSINESS WIRE)--July 12, 2005--American Oriental Bioengineering, Inc. (OTCBB: AOBO - News), a rapidly growing Chinese company which produces and distributes a broad range of pharmaceutical and nutraceutical products, announced today that its common stock has been approved for listing on the American Stock Exchange (AMEX). The company anticipates that its common stock will commence trading on AMEX on July 18, 2005 under the ticker symbol AOB.
AMEX's approval for listing is contingent upon the company being in compliance with all applicable listing standards on the date it begins trading on the exchange, and may be rescinded if the company is not in compliance with such standards.

"We believe that the listing of our company's common stock on AMEX represents recognition from the investment community of the rapid growth and increasing profitability we are experiencing," said Tony (Shujun) Liu, the Company's Chief Executive Officer. "A listing on AMEX should allow us to further increase awareness of our company among the investment community and enable a larger range of investors to own our stock. This listing is a reflection of the contributions we have received from our employees, customers and shareholders who have made this possible."

[David Randolph]

Lol, great news, thanks 3puttssuck, I'll applaud you