SVA

[shaker340]

It may be a rollercoaster ride, but it still is going up

[David Randolph]

SVA is getting better and better. We've had a 10% advance day with volume above average on a day where the general market tanked. I see relative strength on these biotechs related to the Bird Flu (although SVA is much more than that, that's why it is the best stock on its small group).

This stock can easily run up to $20 or more. I don't know the future, but I have a trading plan that makes sure that I will be in for the long pull. The stock was up $0.54 but the TEMA indicator was up only $0.11 yesterday. This makes sure I won't be thrown out of the stock just because of profit taking, but only on a real change in the long term trend of the stock price.

[Michael]

Hi David,

Yeah sure SVA is on fire but still for every buyer there is a seller.

Here is what i don't understand: Who in their right state of mind wake up in the morning and say: "oh the President of United States of America is concerned about the production capacity of flu vaccine i better hurry and sell my Sinovac shares" 

Melf Elf (god bless him) is still trying to explain to me the finer arts of TA, but I have to say that with out understanding the business of a company TA can do more harm than good. I am sure that most sellers of SVA is looking at the RSI and are selling becasue the stock is overbought - from my perspective we haven't even started seeing the buying.

I am adding SVA today (this is only my second purchase, so still one to go!)

Mike

[David Randolph]

Hello Michael, good to see you 

Here is what i don't understand: Who in their right state of mind wake up in the morning and say: "oh the President of United States of America is concerned about the production capacity of flu vaccine i better hurry and sell my Sinovac shares"  Roll 

Who said that? It certainly needs to know some more about a simple law of economics, supply and demand.

Melf Elf (god bless him) is still trying to explain to me the finer arts of TA, but I have to say that with out understanding the business of a company TA can do more harm than good. I am sure that most sellers of SVA is looking at the RSI and are selling because the stock is overbought - from my perspective we haven't even started seeing the buying.

No theory is always right in the stock market. I believe technical analysis and fundamental analysis are both important, as is money management, because there's no way to totally avoid trading mistakes.

Now, there are different methods to use technical analysis. Let me give you my take on this (although I still don't have the discipline to always follow these rules, but I'm getting closer everyday).

The first and most important step of a technical analyst is to define trend. RULE 85 says «Define market action first and then take appropriate action», and RULE 5 says «Trade with the trend».

Overbought and oversold analysis should be a secondary thing, not to be used against the trend. Indicators like the RSI and the Stochastic can be usefull in trading ranges, or for selling rallies in a long term descending trend or buying sell offs in a long term ascending trend.

«Oversold» should be used only when the stock has a decline in a larger bullish trend and «overbought» should be used when the stock has a big short covering rally or a positive reaction on a long term bearish trend.

I am adding SVA today (this is only my second purchase, so still one to go!)

I think that's a good idea  SVA is the most bullish stock on the market at this moment and that's the kind we want. Also the company seems to be extremely undervalued at this point, truly a hidden gem.

I try to use both analysis in tandem to get superior results. I know I'm not an expert in neither of them but I am a complete analyst.

Well, enough of me, and since you don't talk much about yourself (for example, where do you get all that research you sometimes present? What are your selling rules, at a profit and at a loss?), let's go to today's update of SVA.

SVA is the best stock to own in this bear market. I will hold it for as long as it continues to be this way, one must absolutely get big profits out of these when he finds them, because they're rare and they will be even more rare in the future.

So go SVA, go !

[defenderyou]

Are we not below TL2 - are you selling today??

Defenderyou

[basonista]

TL2 for today looks to be roughly $4.60.  David won't sell unless it is set to close below the target price.  It hasn't even been close to that today.

I believe he is using the TEMA indicator on SVA and it is even below the TL2.  No need to worry.  Normal pullback happening.

[Se7en]

Just sold for a 42% gain, will buy back later if it drops more, which it will imo!
I'm all in cash now!

[valueseeker]

I added 20% in today's dip

---------------
CNN said US is absolutely dependent on foreign countries to find and manufacture drugs to fight avian flu, which has now shown up in Romania, Europe. China and India are likely to come up with solutions, of necessity.

SVA update on Avian Flu Vacciane (full update):

http://www.sinovac.com/NewsRoom/2005/9/moaq7av1kw.htm

Threat of a Pandemic

World health authorities fear that if the avian influenza virus undergoes antigenic shift with a human influenza virus, the new subtype created could be both highly contagious and highly lethal in humans. Such a subtype could cause a global influenza pandemic. According to the United States Centre for Disease Control (CDC) there were three pandemics in the 20th century:

- 1918-19, "Spanish flu" caused the highest number of known deaths: between 20 million to 50 million people may have died worldwide. Many people died within the first few days after infection and others died of complications soon after. Nearly half of those who died were young, healthy adults.

- 1957-58, "Asian flu" was first identified in China in late February 1957; it spread to the United States by June and caused about 70,000 deaths.

- 1968-69, "Hong Kong flu" was first detected in Hong Kong in early 1968 and spread to the United States later that year, causing approximately 34,000 deaths. This virus is still in circulation today.

Both the 1957-58 and 1968-69 pandemic viruses were a result of the reassortment of a human virus with an avian influenza virus. The origin of the 1918 pandemic virus is not clear.

[defenderyou]

Added more at 5.15 today; quite a bit actually; Thanks for update on TL2 indicator being at 4.70; thought is twas closer to 5.30

Defenderyou

[shawFund]

History does repeat.

SVA lost 16% with heavy volume and closed at $5.13 today.
If you bought it higher than $5.50, today's close will make you nervous.

That is the risk for momentum stock.

Followings are the two charts (2004 and 2005):

[defenderyou]

Do you think we are to repeat the 2004 pattern next week?

Defenderyou

[owen654321]

Do you think we are to repeat the 2004 pattern next week?

It sounds like shawFund believes history will repeat.  However, I see a difference in volume between the two runups.  Perhaps someone could correct me if I am wrong...

I see the two scales of volume in the 2004 and 2005 runups differing.  2004 appears to have trended upwards on lower volume overall, with massive volume on the crash.  The 2005 runup has had consistently higher volume on up days and (relatively) lower volume on the recent down day.

I'm not saying I don't think this might drift lower in the upcoming days, but the general feel of Friday's action was one of a short-term trader shake-out, complete with fear and technical mindgames...   I added a small amount to my position on Friday, and will continue to hold unless volume suddenly dries up, or if David pulls the trigger...  

These "bird flu" stocks may be high-risk, white-knuckle rides, but I believe that at least one will be very rewarding if held through these upcoming weeks.  Of course, I have no clue which one will be the winner...

My biggest psychological obstacle has been that I tend to take profits too early and then watch the stock continue on to a double or triple, so I will continue to hold and use this as a learning experience, if not a profitable one.  Either way, HYRF looks like it will singlehandedly balance out any bad calls I make with the asian flu speculative plays!

Owen

[valueseeker]

3 weekend news on Avian flu:

- 20K birds died of Avian flu in Turkey
- confirmed bird flu in Romania
- confirmed 4-yr old boy with Avian flu in Indonisia

I think SVA will sell every single normal flu vaccine it can produce in the coming flu season partly due to the fear of Avian flu, and turns itself into a cash generating machine like AOB in the next few quarters.

[David Randolph]

One word for Melf Elf, it looks like he was right, SVA was overbought 

Anyway, the trend is still definitely bullish and the fundamental background of this company warrants much higher prices. I've set a trading plan which allows some room for fluctuation, making sure that I'm not thrown out of the windown just by a correction phase.

Only a true reversal in trend will make me sell my position on SVA. I define the trend as bullish for as long as the price closes above the TEMA indicator (red line on the chart). For today that indicator will be standing at $4.15.

But, given the nature of the selloff (-16% in just one day without a technical warning) and the news concerning the Avian Flu that came out during the weekend, with the disease spreading to Europe on birds, I guess the stock will challenge the highs soon, maybe today.

[REALDEALS21]

David, do you have a price target on SVA or you are just letting it run until the stop target ?