Why is $PACB continuing to show strength?  What is the fundamental driver here?

First off, the problems and issues that brought $PACB’s DNA Sequencer down since their IPO have been addressed and remedied according to their latest earnings report update.  Customers are beginning to come back.

However, I believe the latest price upward momentum may have to do with the latest find:

Scientists Assess Error Modes in Sequencing Platforms and Find SMRT Sequencing ‘Least Biased’

Monday, August 19, 2013

Scientists Assess Error Modes in Sequencing Platforms and Find SMRT Sequencing ‘Least Biased’

A paper from scientists at the Broad Institute reports a rigorous study of bias across all major sequencing platforms. In “Characterizing and measuring bias in sequence data,” published in Genome Biology, lead author Michael Ross and his colleagues report that SMRT® Sequencing on the PacBio® sequencer is the “least biased” in coverage of all the technologies studied.

The authors assessed sequences for coverage bias, or uniformity of read distribution, and error bias, or incorrect call at a given position. For coverage bias, they report that PacBio performed best in extreme GC content (both GC-rich and GC-poor) and suggest this may be related to the lack of an amplification step in the sequencing process. Regarding error bias, the scientists describe shifting error rates based on genome sequence; GC-rich or homopolymer regions, for example, tended to change the rate of errors for each platform. “In general, the sequence context dependence of error rates varied considerably from technology to technology,” they write.

Ross et al. note that each platform’s bias rate changes with technology development, but note that at the time of their work, “single-molecule data from Pacific Biosciences” had “the clear edge.”

Below is the actual report from Genome Biology:

Research
Characterizing and measuring bias in sequence data

Michael G Ross*, Carsten Russ, Maura Costello, Andrew Hollinger, Niall J Lennon, Ryan Hegarty, Chad Nusbaum and David B Jaffe

Genome Biology 2013, 14:R51   doi:10.1186/gb-2013-14-5-r51
Published: 29 May 2013
Abstract
Background

DNA sequencing technologies deviate from the ideal uniform distribution of reads. These biases impair scientific and medical applications. Accordingly, we have developed computational methods for discovering, describing and measuring bias.
Results

We applied these methods to the Illumina, Ion Torrent, Pacific Biosciences and Complete Genomics sequencing platforms, using data from human and from a set of microbes with diverse base compositions. As in previous work, library construction conditions significantly influence sequencing bias. Pacific Biosciences coverage levels are the least biased, followed by Illumina, although all technologies exhibit error-rate biases in high- and low-GC regions and at long homopolymer runs. The GC-rich regions prone to low coverage include a number of human promoters, so we therefore catalog 1,000 that were exceptionally resistant to sequencing. Our results indicate that combining data from two technologies can reduce coverage bias if the biases in the component technologies are complementary and of similar magnitude. Analysis of Illumina data representing 120-fold coverage of a well-studied human sample reveals that 0.20% of the autosomal genome was covered at less than 10% of the genome-wide average. Excluding locations that were similar to known bias motifs or likely due to sample-reference variations left only 0.045% of the autosomal genome with unexplained poor coverage.
Conclusions

The assays presented in this paper provide a comprehensive view of sequencing bias, which can be used to drive laboratory improvements and to monitor production processes. Development guided by these assays should result in improved genome assemblies and better coverage of biologically important loci.

Enough about the fundamental, take a look at the weekly chart below:

While there is a beauty in seeing the nice rally today, price action needs to take out the nearest resistance at $4.00 so it can move on to the next target at $5.27 which was the high made in 2/17/2012.  Since both resistances are more than a year old; breaking out of these resistances can only mean that the power behind the move is substantial and strong; otherwise, price action will fall apart after touching the resistance(s).

Giving the new development in how much better $PACB’s DNA Sequencer is due to its being the “least biased”, I’m betting that price can cut thru those resistances like hot knife against butter.

Needless to day, I added more $PACB today due to strong morning price action.

My 2 cents.

 

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I’ve traded in and out of $PACB in the past with some success.  I had one big win but was stung with plenty of whipsaws due to my bad timing and inability to hold the stock with conviction; as a result, I took it off my radar until now.

From the recent earning announcement, it seems that $PACB’s Gene Sequencer has been perfected in a way that the biotech industry is beginning to take notice. For further reading on this, please click on this link.

I’m jumping back on this trade because of better fundamental and because of technical breakout.

Take a look at the daily chart below:

Did you see the persistence bullish price action after the breakout point despite the general market correction for the last few days?

Below is the weekly chart:

If $PACB’s revamped Gene Sequencer becomes the favorite in the biotech industry, we can expect to see the price climbs back to the IPO level of $16.  (Don’t need me to remind you of the Big IF here…)

I was planning to buy more from scaling down. Since price refused to go down, I had no choice but began buying when price kept on climbing for the last two days.

My 2 cents.

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Can you see the daily subtle buying interest in $PACB for the last 3 weeks?  The monthly, weekly, daily, hourly, and 15m charts all reflect an upward trend.  I fathom that something must be cooking inside $PACB that is smelling good; therefore, I’ve bought position in $PACB today even though price has been up quite a bit recently.

See below multi-charts window:

My 2 cents.

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Yesterday, I saw the doji formation on $PACB above the 79 & 89 moving averages; so without hesitation, I bought back $PACB.  I did not hesitate simply because when you have a doji formation at the bottom of a downtrend near a support area, the odd (or probability) of a turnaround is high.  No, it is not 100% but the odd is in your favor.  So, like a blackjack card-counter who sees that the undistributed cards are stacked with 10s, Jacks, Queens, and Kings, he starts to bet big.  In my case, I simply bought back my position.

I also added more in the early morning because of the upward bias.

Look at the beauty below:

Notice that I’ve been cutting losses on $PACB during the previous downtrend to cut loss and yet here I am back on the saddle riding the rally up.  If this doesn’t convince you the value of cutting loss fast and the fact that cutting loss earlier doesn’t mean you will miss the boat (not all the times; but some of the times), I don’t know what will?

My 2 cents.

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Seeing that price action did not continue to the south side like $DCTH, I’m going back into $PACB.

Today bounce may mean the selling is over from whoever has been trying to get out.  The chart below shows that the general uptrend is still intact with price action still trading over the 79 sma and 89 xma.

The way I see it, it is a low risk trade if I put my stop below the 79 & 89 ma.

My 2 cents.

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Breaking news: Private Equity Group Reportedly Looking At Life Technologies

All of a sudden, DNA-sequencing or Gene-sequencing is catching the limelight.  Why not?  If the technology can contribute to our biological science to improve our  quality of life, it is time to celebrate!

Look at the daily chart below:

We are seeing a potential double-breakout today if price action can close over $2.39 today.  I like to see price action makes a run for the previous high of $3.25.

$LIFE is a $10.5 billion market cap company, if $PACB can compete, even in a small way, its value is way undervalued right now for the potential since this is essentially still a small-cap company with a lot of room to grow.

My 2 cents.

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I’m talking about buying PACB for the 2nd time to see if it will run again.

I bought PACB not too long ago but left a lot on the table after I took profit.

Let’s see if I can make it up from last time and take home more dough this time.

Take a look at the daily PACB chart below

Did you notice the round up from the support at the 89 xma line?  I like the fact that it has taken out yesterday high.

Just my 2 cents.

Trade well!

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