SVA

[usedcasting]

It's currently BID 2.92...ASK 2.95.
Im sorry if im missing something, but what are you talking about?

I think Melf meant bid 4.92 ... ask 4.95

Melf Elf, thanks for your help on this one, I just ended my position. Over all I made a good return, but I hung on a bit to long.

Cheers
uc.

[Melf Elf]

It's currently BID 2.92...ASK 2.95.
Im sorry if im missing something, but what are you talking about?

puenthouse,

Sorry about that.  It was a typo error, as usedcasting explained.

Over all I made a good return, but I hung on a bit to long.

That's great!  How about those devils closing SVA yesterday exactly at 4.89? 

If SVA closes below 4.89, we'll have a close below that double neckline on the daily chart that I posted yesterday.

If I had been long, they would have gotten me on that late day break to 4.82.  I would have sold it.

[ScottishTrader]

But its acting well today - DNDN another breakdown is also acting well, probably off earnings and in anticipation of the CC.

Somewhat strange and infuriating, but I'm steering clear for now.

[Lucas Scott]

I find Friday afternoon is a good time to buy and I like SVA for a short term trade at this point. Bought at 5.15 and my mental stop is below the 50MA (currently 4.84).  Looking for a move back towards $6 next week.

[defenderyou]

MELF:

Just read the posts on the six trades. Seems that enough has been said; but I stick to what I said he made 11-13% (depending on the numbers) not 78%; asumming he put 4100 into those six trades then he has 111 -113 bucks and not 178.

ANyway we both agred that 11-13% in a month aint too shabby.

Actually more interedted in your views on SVA. I sold out most of my SVA at 5.20 (should have sold sooner) and above but held a few thousand shares - based on todays action do you think the technical pattern you referred too in your recent note still holds - that we maybe looking at $6 or more?

Appreciate your thoughts

Thanks

D

[jorgegr]

I think we need more volume (at least 1500000 shares traded during a couple of days) to get near
5.50 which is an important resistance and from there at least 2000000 to get safely to
6. Some good news would help.

jorgegr

[Melf Elf]

- based on todays action do you think the technical pattern you referred too in your recent note still holds - that we maybe looking at $6 or more?

defenderyou,

The way that I look at this, the bears have had four successful moves off the October 17 top:

1. They broke the Bear Flag (dark blue lines on chart) at about 6.15 on October 27.  Target: 4.99 was made.

Math for the target:

Top of the Flag was 6.67.  Bottom of the Flag was 5.51.  6.67 - 5.51 = 1.16 points.
Subtract that from the point of the break at 6.15. 
6.15 - 1.16 points = Target: 4.99, which was made on October 31.

2. On October 28, Double support at 5.75 was broken.

3. On October 28, the bottom of the Bear Flag at 5.51 also was taken out.

4. "The President's Bird Flu Speech" rally on November 1 ended at 5.55.  Former support (5.51) became resistance. (I was hoping for a rally to Triple Resistance at 6.00-ish, so I could short it).

On Thursday, November 3, the bulls defended 4.89-4.91 on a closing basis, and went on offense.  The bulls haven't done anything bullish yet; they only defended important support.

If the bulls can take out 5.55 and the down trendliine off October 18, then they've done something bullish "on offense," so to speak.

Basis the log chart below, the down trendline comes in on Monday, November 7 at about 5.65 (hard to read on a log chart).  On Tuesday, November 8, that down trendline comes in just about dead on 5.55, which is the price resistance above which the bulls need to get.

That would be a "W"-bottom takeout.  I always use the more conservative number for a target, so I would use the the left leg, the October 31 low of 4.91 to measure the target, rather than the low of the right leg at 4.82, on November 3.  Using either one is fine.

Math:

5.55 high - 4.91 low = 0.64 points.  EDIT: it's 0.64, not 0.61.
0.61 points added to a breakout above 5.55 ... 0.64 + 5.55 = Target: 6.19.

That would get us up to the area of both the rising broken neckline (dotted red line) and the broken up trendline (solid green).  Those trendlines on the log chart actually are higher than 6.16, so SVA could run above the 6.19 target if we get up there.

In the "There's Always Something To Worry About" department, when SVA broke below the up trendline (solid green line), it was mentioned that the up trendline didn't break on the linear chart.  Fair enough.  It's often a problem trying to figure which chart to use: log or linear.

I'll show you the linear chart separately, for easier viewing.

[Melf Elf]

Basis the linear chart, the up trendline off the August 19 low was violated intraday on October 31, but it held on a closing basis.  True enough.  Let's follow up on that.

November 1, SVA went higher on Bush's bird flu speech, which supported the case for "Follow the linear chart...it's still bullish."

Where that argument fell apart was when SVA got stopped at former resistance (the October 18 bottom of the Bear Flag at 5.51), then closed below the up trendline the following day.

Now, the up trendline was broken on both the log and linear charts, and we got the re-test of 4.89-4.91 support.

Look at Friday's high on the linear chart: it was right at the bottom of the broken up trendline.

[patriotmp]

  Melf Elf....

     I like reading your posts and following your TA as you break it down but your last chart is cut off at october...and I can't see what you are talking about. Wasn't sure if you were aware of it or not. Thanks..

[basonista]

Use the scrollbar at the bottom of his post.

[logocovet]

Melf Elf,

I found it very interesting that you consider shorting SVA.  I've always held my the idea that it is not a good idea to short stocks with good fundamentals as there are always plenty of stocks with bad fundamentas and in a general downtrend.  Does this come into your consideration in your trading decisions?

I am also expecting SVA to come out with PR regarding the WHO meeting and a deal with Thailand.  Do you consider "expected" PR when you make decisions to short a stock? 

Oh, and about David.  The best lesson I've learned from David is to limit losses and let your winners run.  I like the fact that David is ready to admit it when he is wrong (u will not get this from most analysts or stockpickers).  If you look @ David's record, he has more losses than winners but he is up a great deal.  One thing I do wish is that David does take more than "the time it takes to buy a refrigerator" to analyze a stock.  This has caused some mistakes (USEY, BIDU).  Just my 2 cents.

[Melf Elf]

Melf Elf,

I found it very interesting that you consider shorting SVA.  I've always held my the idea that it is not a good idea to short stocks with good fundamentals as there are always plenty of stocks with bad fundamentas and in a general downtrend.  Does this come into your consideration in your trading decisions?

If the fundamentals look good but the chart looks bearish, I go with the chart.  (see repost below from the STX file for explanation).

I am also expecting SVA to come out with PR regarding the WHO meeting and a deal with Thailand.  Do you consider "expected" PR when you make decisions to short a stock? 

Yes, I was hoping that the PR regarding the president's bird flu speech last Tuesday would generate enough excitement to fuel a rally to triple resistance near 6.00, which I liked as a short. 

STX repost:

"This is one of those "counter-intuitive" things, but let's walk through it:

Scroll down and look at the Inverse H&S breakout in November, 2004.  At that time, trailing twelve month earnings were $0.24, so at the point of the upside breakout, STX was trading at a P/E of 60 basis TTM. 

That's a very high P/E, and we might have been inclined to pass on the trade based on that.  However, if we remember that the market is a discounting mechanism, and that it looks forward about six months, we might have been inclined to play the breakout, and make a nice profit.

Six months from the November breakout (roughly) STX was up 100% off the August, 2004 low, and after the November, 2004 breakout, earnings improved as we went along.

Now, on August 25, 2005, STX gapped down to 17.60, below a H&S top on very nice trailing twelve month earnings.  At 17.60, the P/E ratio was only 12.84 basis TTM.  Just as we might have been inclined to pass on buying the Inverse Head & Shoulders breakout in November, 2004 because of the high P/E ratio, we're now inclined to BUY the Inverse H&S breakdown because of the low P/E. 

Hmm-mm...now, what did we say about the market being a discounting mechanism? 

1. STX has broken the neckline of a H&S top.
2. STX has  broken June, 2005 support at 17.04
3. STX has broken April, 2005 suppot at 16.422

All in only five sessions.

Just my opinion, but when the chart isn't playing out what the fundamentals are indicating (they appeared to be bad in November, 2004...the appear to be good in August, 2005), I defer to the chart. It's damaged, technically.

Watching the price action in STX this week, BTW, I'm now pretty convinced that the "dubious" Piper Jaffray upgrade on Monday was an attempt to distribute some STX stock on the one day rally back to the broken neckline that their "upgrade" generated.

Maybe I've become too cynical."   

[vic666]

looks to be moving up...to form the right side of a cup pattern....stochastics have bottomed out and an nice swing back up from the charts (the way I see it)...also, the ultimate oscillator is nicely rebounding off of level 30....the last time this happened...see how nice the move was...

the only thing i'm waititng for is some volume. 

[AussieTrader]

I'm holding SVA as I think something is brewing here (I think I said in a previous post I wanted to hold through the WHO conference). Charts have been turning over that is certainly true, however I held because I saw suport hold on my weekly chart at the 9ema and a reversal being put in from that zone. Now my main indicators (such as MACD Histo) were saying be very cautious (and still are). But the thing with this type of news hysteria driven bird flu thing is that the chart can correct in a flash when news hits the wires. Right now news out of China is kinda depressing from the flu standpoint, but supportive for the stock price because most of the action (as it were is in China, or at least the Asian sphere of influence):

China closes poultry markets http://apnews.myway.com/article/20051107/D8DNL4L80.html

WHO Avian Flu conference (SVA presenting there) http://www.disasternews.net/news/news.php?articleid=2942

'Some countries are researching other anti-viral drugs and one news report said China had developed a vaccine to prevent bird flu in humans. According to the WHO, "at least 10 vaccine developers in as many countries are carrying out demonstration projects to develop and evaluate vaccines primarily against the H5N1 subtype."
Now that is just a gossip quote, but it is fuel to the fire and frenzy.

Anyway enough news, SVA did OK today and there is some crazy after hours trades at $6.50 (just a few K shares) now that could either be reaction to all this news/gossip happening or it just could be a few fools desperately buying 'before the train leaves the station' as some amatuers/pumpers like to shout. I guess Tuesday will confirm what the truth is.

Good Luck

[Michael]

Hi Aussie,

Indeed something is brewing. I don't know if there is any truth to the rumour that Sinovac already has a vaccine ready but it is only a matter of time before they will. Vaccine development in China is both faster than in the states and cheaper!

Another confirmation that SVA is moving fast with their vaccine came from Thailand today :

Dr Prasert said authorities should start thinking about ordering other drugs beside Tamiflu.

The Government Pharmaceutical Organization (GPO) plans to produce around one million capsules of the generic version of Tamiflu by next year. The Thai version would reduce the price per capsule from 120 baht to 70 baht.

The GPO is also negotiating with French and Chinese pharmaceutical firms to produce influenza vaccines in Thailand. Mongkol Jivasantikarn, GPO's managing director, said cooperation with China's Sinovac Biotech was possible.

Today should be another good day for SVA shareholders