AOB

[David Randolph]

I've read the research from Westminster with much joy (thanks Michael for the report). But I think it's not wise to change a trading plan because of a brokerage house call or research.

I make my own game and have my motivations to buy or sell. In this case I have the chance of taking a 38% profit in a few days, mostly because of unexpected items:

1) Company went from OTCBB to AMEX
2) Upgrade from Westminster (loses a bit of credibility from this fact: «AOB is an investment banking client of Westminster Securities Corporation, which makes a market in the trading of AOB shares.»
3) Revaluation of the yuan

Three unexpected bullish factors (unexpected and not accounted when I bought the stock in the first place) produced the advance phase on AOB. I like much more of rising stocks without any evident motives ... (the motives are behind the scenes, only known later by the general public, but shown in market action).

I guess I was luck on AOB, and luck is a rare thing in the stock market ... I don't want to push it too much, so I'll try to sell AOB around my technical target of $2.48 a share.

[valueseeker]

I am in.

Yuan will appreciate further and most likely another 2-3% increase in 6 months. It can go up as much as 20% in the next 5 yrs.

Thanks Dave & Michael for your good analysis. I am in for the long term (~1 year)

[AustinPowers]

I am currently not in this this stock but thought I'd just pass some info. along for those that are.  I just saw a message on the yahoo SIRI board pumping this stock and claiming $5 per share within 5 days.  Awareness of the stock is being created for some reason.   Anyone aware of anything? 

[David Randolph]

I sold AOB at $2.48, a 38% profit.

[stocky]

Good trade dave, applaud

[puenthouse]

Dave, you gave your target, you hit it and then sold it.  You hold you word.  Why dont you put t-stop on a stock like this?  With a stock like this going up I put a small trail stop on it and will ride it up unitl the stock falls activating the stop.

[David Randolph]

Thanks for your posts on AOB.

Perhaps you're right puenthouse, AOB is still on a bullish trend and one should let the profits run. But to change my initial trading plan I need a strong motive, which I don't have here.

The rise in AOB wasn't natural, we got:

1) AOBO.OB turning into AOB, moving from the OTCBB to the AMEX.
2) Buy recommendation from Westminster (the company has banking ties and is the MM of AOB's stock).
3) Yuan revaluation

Anyway, the stock is cheap at current levels, I wish all the best to those who continue to hold AOB.

[Michael]

David,

Congratulation with you profit. Yet another profitable pick

I do however tend to echo puenthouse' sentiment even though I should know better than questioning your targets and trading plans!

Have a look at the 2 year chart:



I really can't see any resistance until around 3 but I can see a lot of reason why the trend will continue:

• We just had a golden cross of MA50/MA200
• The change to AMEX is a real thing, which gives investors more faith in the company (some people including myself is reluctant to invest in OB stocks)
• The Yuan revaluation is also very real and might be the first in a row.
• I agree that you should be skeptical for the Westminster research but the actual reported figures shows spectacular growth Quarter over quarter (69% for Q1 2005)
• The PEG is 0.21 so the stock is still very cheap (read undervalued) even after this run up
• The Chinese privatization of the pharmaceutical industry offers AOB a unique opportunity for profitable growth through acquisitions

I am still very bullish on AOB. We might see the "Dave effect" short term but AOB is a steal at these levels.

[zhufred]

sell or buy?

[puenthouse]

zhufred, in times like this, and i take it you are down.  I would just put a short trail stop and ride it up till it drops, unless you want to long this.  the volume is down.  we got lucky and hit the good news and got out.
GL

[valueseeker]

I am staying (it closed around the price I bought).

- Very undervalued
- Aging & weathier chinese people
- Getting into overseas market
- AMEX listing
- Chinse yuan appreciation (I think part of the drop last 2 days was that they saw a report saying chinese government claims no more further appreciation, but they said no appreciation since last week's surprise adjustment, so I think there will be another 2% next year)
- Growing every year

[Michael]

Hi Valueseeker,

I have doubled my position today. We have seen a small correction as the stock was over bought. It seems like the correction is over and AOB will soon be ready to continue its uptrend.

Fundamentally there is no reason that the stock should trade at these levels and technically it will soon also be ready to move. I remember Melf Elf has been talking about a bullish flag formation and this seems to resample that. Melf Elf do you agree?

[zhufred]

Thanks Michael for your information.

[valueseeker]

Hi Michael,

Good for you. Yeah, I think the "warning" from the chinese government gave them a triggering point to do the correction on Tuesday and it's heading further up from now.


-Louis

[shaker340]

Thanks Michael,
    You were right on the move, applauded