How many missed the $DDD, $SSYS, $PRLB, $XONE run when we had a chance to buy in mid-March but didn’t?
$ONVO, a biotech 3D, has recently been uplisted to NYSE; therefore, it is no longer an OTC bulletin board stock. This mean all the big guys (institutional and mutual funds holders) can now buy this stock.
$ONVO has two beta-risks lumped together- biotech and new technology. If this technology and biotech show any hint of proof of concept to create 3D human organ parts for replacing our diseased organs, this company will leave $DDD, $SSYS, etc in the dust. On the other hand, be prepared for further dilution from secondary offering when money run out in the future.
I believe the weekly chart below is sufficed to show you the breakout pattern.
I bought some today and added more when price continued higher.
My 2 cents.
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I think their real game is to generate artificial in vitro conditions for preclinical testing and basic research. People may buy that but they have to prove it’s as a good as the real thing (pretty much everyone is able to grow cells nowadays, although this would be convenient) in terms of predictive value (that’s pretty limited anyway), complexity etc. Artificial organs? Seems like a pipe dream. But maybe many many many years from now.
You’re correct about the artificial organ being far far away from now; but I think the value is their ability to “works across various tissue and cell types, and allows for the placement of cells in desired pattern.” The quotation comes from Yahoo’s ONVO profile which I pasted below.
“Organovo Holdings, Inc. develops three-dimensional (3D) bioprinting technology for creating functional human tissues on demand for research and medical applications. The companys 3D NovoGen bioprinting technology works across various tissue and cell types, and allows for the placement of cells in desired pattern. It offers NovoGen MMX Bioprinter, a commercial hardware and software bioprinter platform to create tissues for bioprinting research and development. The company was founded in 2007 and is based in San Diego, California.”
I like to see that it works as good as the real thing like you say for the betterment of science as well as the stock price.
Thanks for sharing!
Cheers!
Been looking at it but not sure where to set a stop. Based on your chart, maybe around 5.50 to give it some room. From current price, that’s a steep loss. For me, may need to wait for a pullback.
Hi Bill,
Yes, trading according to your own risk tolerance is always the best method. Biotech is very volatile and close stop can sometimes leave you frustrated. What I like to do is to buy a small stake if I see the risk is already high for a standard size position just to have it in my portfolio to remind me of it; otherwise, over time I will forget all about it to my own opportunity loss.
Let’s say I want to “speculate” $10,000 in this stock; I will start by buying $1,000 worth of it today. If price start to head down, I’ll begin to accumulate $1,000 worth at a time. Let’s say my stop is $5.50; I will plan it so that by the time price find support at $5.80, I’ll accumulate the whole $10,000 worth of the stock. By this time, my stop at $5.50 won’t be so steep then.
Hope it helps.
Cheers!
I like to add that this type of buying is called scaling in. This is not the same as averaging down.
The difference b/w scaling in and averaging down is the risk profile you are assigning to the speculation.
If you are only willing to risk $10K with a risk of $1K (10%) if you are stopped out, scaling in allows you the ability to buy at a time when risk is much higher with a far away stop. Scaling in give you the opportunity to hold “some” position if market momentum of the stock keeps going up. It also gives you the opportunity to “stop” scaling in if price drops much faster than you like during the process. This can also reduce your losses since you are not holding a full size $10K position if price hit your stop at $5.50.
Averaging down is when you are buying more when you have already bought $10K worth of the stock and price continues to head lower against you. By buying more, you are increasing your risk by speculating more than the $10K you have assigned yourself. Furthermore, you will now lose more than $1K (10%) if your original stop of $5.50 is still there.
Can you see the huge difference b/w the scaling in and averaging down in term of you ability to manage risk during the trade?
Scaling in gives you the option to reduce risk further more by stop adding more when price accelerates downward faster than you are comfortable with. If price does not hit your stop, you are still in the trade with less heart palpitation since you are working with less then $10K and the risk is much smaller if you are stopped out at $5.50.
Meanwhile, if price accelerates downward faster after you have averaged down with more than $10K in the stock, you are likely going into “tilt” with severe emotional reaction that may prove detrimental to your portfolio.
Biotech can be highly rewarded but you have to give full respect to the risk you are dealing with.
Btw, full due diligence is required on your part to understand the science behind the biotech you are speculating in so you can have some “conviction” to hold against a drawdown before your stop is hit. And it is a good idea to stay away from the message board since they are filled with pumpers and shorters talking BS to manipulate your emotion. It is even worse if you participate in the message board defending the stocks ’cause once you do, you are married to the stock.
My 2 cents.