Aswere alerted on Friday afternoon:
Bought 4000 Luna Innovations Inc. (LUNA) at 3.36…New day high, already jumped to 3.50ish before i could even write the alert…cup and handle on the multi-month chart, conference call monday…only a $35 million marketcap…expanded relationship with Intuitive Surgical, Inc. (ISRG)…gonna get lots of medical people excited over the weekend…conf. call begins mid-day monday so my goal is to sell into a gap up of people excited by that call…u shoulda all be watching this all day, perfect breakout with catalyst…let lionmaster try to short such a strong story as this…target of 4 next week
When I bought, at 3.36 this was the chart:
And yet after taking out the day high and being alerted on several websites, the stock soooooared past my target to the high $4s as this picture perfect breakout (over multiple time frames) is the EXACT afternoon breakout dissected at length in my PennyStocking Part Deux DVD:
I knew thanks to LUNA’s website that they can emerge from bankruptcy as early as January 12th…I’m sure this contract ups the odds of that happening dramatically….predictable positive press release coming from that.
I also knew $4 to be a key price level (which is why I placed my conservative target there) as there just so happens to be a NASDAQ hearing on January 13th to see if LUNA can stay listed…one of the requirements is $4 stock price minimum…so given the current price and momentum behind the runup, I’d say there’s a probability of holding that key price level which would create further good news for LUNA …predictable positive press release coming from that too.
All because of this hugely positive news with ISRG…and understand as also teach, there were some very specific things in the press release that clued me into this having great odds of becoming a multi-day runner…namely:
“Luna and Intuitive will be extending their development and supply agreement to further develop Luna’s technology for its products.”
“We continue to view Luna as a strong technology partner in the area of advanced shape sensing and position tracking systems,” said Dave Rosa, Intuitive’s Vice President of New Product Development. “Our development with Luna is progressing well and Intuitive remains committed to our joint project.”
…meaning this isn’t some little deal, this is ISRG loving LUNA’s technology, not only extending their current contract but wanting to “further develop” their “join product”.
When LUNA initially announced thir ISRG deal in mid-2007, the stock also surged from the 3s to the 4s (and into the 5s even)…but since then ISRG’s revenues have nearly doubled so I’m guessing this time around, LUNA’s stock price should also be valued higher (which is why I think the 5s and maybe even the 6s or 7s are possible this coming week…depending on the news from the conference call, bankruptcy and NASDAQ hearing (busy week for LUNA)
And as evidenced by their last quarterly statement, LUNA isn’t the healthiest of companies (they couldn’t even issue guidance because they didn’t know if they’d be in business!), so this contract is incredibly important to raise capital…making this all seem rather like Vermillion Inc. (VRMLQ) which also recently emerged from bankruptcy, raised a bunch of money at its current stock price (stocks with big potential don’t have to do toxic financings) and became the #1 performing stock of 2009.
I suspect we’ll hear exactly how far the rabbit hole goes in Monday’s mid-day conference call (can you say catalyst for short squeeze, big gap up and/or morning spike? Lots of short sellers afterhours Friday, but the stock still finished up afterhours…potential for biiiiig Monday short squeeze), but it’s safe to say this is a MONSTER win for a tiny $30 million company like LUNA emerging from bankruptcy and partnering with the $12 billion next generation medical leader like ISRG.
I’ll probly sell Monday just because I want to lock all or most of my 50%ish gain, but after seeing the short sellers enter based on price action and assumptions without researching all the upcoming catalysts, this has become the PERFECT recipe for a major morning short squeeze…will know my expectations when they receive their daily watchlist Sunday night, the rest of you can just sit and wonder.
As I write this, I am still long 4,000 shares from $3.36, up $5,600ish (nice $10,000 week for me to start off 2010) andbaaaaanked $8,000 so far:
In 28 minutes you cleaned my -$1500 slate with a final touch down of LUNA 3K shares and I an now +$2200…+$3700 overall
bought 2000 @3.71 sold at 4.30, Prob leaving alot on the table, but hate carrying over weekend, but made $1180
I bought just before your alert. I only bought 2K shares @ about 3.50 average (up $2,000ish), but I’m glad I did. What a week I made 5k on CYCC, my first real victory, and we will see how this goes. Cheers.
+$852.40 on LUNA
Already realized $200 on a $2K investment.
Risk is that it’s surged too quickly, but if you witnessed the strong momentum buying into the market close and afterhours, you’d be scared to short such a tiny marketcap medical stock with some seriously positive probable catalysts all next week…