Introduction: Those Were The Days; A Walk Down NNVC Lane On Tuesday, August 30, 2005, I introduced the readers of my AllAllan blog to NanoViricides (NNVC), a penny stock trading on the pink sheets. Although it was under 10 cents when I first introduced the shares to my readers, the "split adjusted" price shown in this chart below is about $5.00. The hook: Bird Flu - NNVC was all over it. During the next 6-8 months these shares soared, in fact, so much so that many of my current subscribers to Blue Line Trading have remained readers and subscribers, ever since. (Thank you.) Note how well our 50% trailing profit stop would have worked in early 2006. This is why recognizing an opportunity and managing the exit are inseparable. The special situation then was penny stock-bird flu-biotechnology. The AI-Genomics theme may rhyme with the bird flu mania of the early 2000's, but in so many ways it is much bigger, its scope more universal and its potential much greater than that which sent NNVC soaring in 2005-2006. FWIW, from our entry into NNVC in late summer, 2005, at around $5, split adjusted, the maximum gain was 5,150% into the following March. Even a fraction of that kind of return as the AI-Genomics science unfolds in the years ahead will be well worth our diligence in identifying and investing in the runners in this sector. As the NNVC chart so clearly shows, getting in early created the opportunity; managing the exit determined how much we kept. I see the potential for substantial opportunities as AI and genomics develop over the coming years. How much of that potential becomes a profitable trade will depend on our entries, our exits, and which companies actually deliver. A more recent example was Tesla. In December 2019, I selected TSLA as my stock of the year for 2020 and recommended the January 2021 $420 calls at $35. You can revisit that original reasoning in “Game Changer,” linked here. Those calls, if held until expiration ,topped off north of 10,000%. Even a :"just in case" remainder position paid off big time: "In Dec, 2019 I sent out the "Game Changer" white paper in which we initiated a Long position in TSLA at $70. In the ensuing 13 months TSLA rose to $900, a gain of 12X the original investment. The recommended Jan 2021 $84 LEAPS rose from $740 at expiration, a gain of approximately 10,000% I have not been this bullish on TSLA since then. *all above prices adjusted for 5:1 stock split effective Aug 31, 2020." Link The value of revisiting these calls is seeing what we recognized before the outcome was known: a developing theme and a specific way to participate. What makes those experiences relevant today is the way they began: a developing theme, companies positioned to participate, and price action that gave us a reason to pay attention. AI Meets Genomics: One Theme, Two Ways to Participate. That is the approach I want to bring to AI and genomics. We don’t need another NNVC or another TSLA to make this worthwhile. We need opportunities where the underlying story and the charts reinforce one another—and the discipline to exit when they no longer do. For Premium, the beginning focus is ARKG as our core vehicle for participating in the theme. For PRO, we will focus more closely on selected individual companies and the setups they offer. When a stock presents a set-up suitable for both Premium and PRO Services I won't hesitate to offer entries in both. The same principle: fundamentals help us identify what to watch; technicals help us decide when to act. ARKG - One stop shopping The ARKG top ten holdings are a virtual who's who of cutting-edge genomics companies who will be leading, "the genomics revolution," in the coming years. Maybe it's not as exciting as a low-priced small cap that is the hit of Internet chat rooms, but it is an easy and a convenient way to gain exposure to several companies in the sector. ARKG - Weekly Price is approaching the downward sloping red resistance trend lines from the February, 2021 highs, around $115. A clean breakout, currently a daily close above $55 is our trigger to buy January 15, 2027 $55 calls. ARKG - Jan Calls TWST — A Leading ARKG Holding With a Larger Option Commitment. TWST Jan Calls The comparison with TWST illustrates ARKG’s smaller dollar commitment per contract. In these snapshots, the ARKG January $55 call is offered at $5.50, versus $38.00 for TWST’s January $195 call—approximately $550 versus $3,800 per contract. That makes ARKG more accessible to smaller accounts, although a lower premium alone does not establish better value. RXRX (Recursion Pharmaceuticals) - An aggressive lower priced AI-Genomics Pick - Pending Breakout This pure play in the AI-Genomics sector needs a daily close above $4.50 to qualify as its breakout Buy Signal. RXRX - January $4.00 Calls RXRX remains Buy Pending. A daily close above $4.50 will trigger our planned purchase of the January 15, 2027 $4 calls. A weekly close above that level would provide additional confirmation. The displayed option prices are reference quotes; we will reassess pricing when the signal occurs. The lower strike provides greater stock sensitivity than the $5 calls, while keeping the initial dollar commitment modest. SPCX - Existing Position Updated Friday’s breakout strengthens the bullish case. If SPCX holds the breakout and continues making higher highs, a return toward the $225 area becomes a scenario worth watching going into 2027. This Dec $170C position taken on Sep 11th is just now beginning its ignition, take-off ascent. If you don't mind a double dose of leverage, consider the SPCH (2X SPCX ETF) December $11 Calls - SPCH is a leveraged ETF for SPCX, targeting twice SPCX's daily performance; returns over longer periods can differ substantially from that multiple - If only we had a 2X Bullish ETF for TSLA in December, 2019..... SPCH Dec Calls On about a 7.5% rise in SPCX on Friday, the SPCH Dec $11C was up 65%, a significant percentage gain on the underlying share price. Now imagine SpaceX rising up toward its post-IPO high ($225) over the next three months. We may be rolling these December calls into a 2027 expiration month should these calls go deep-in-the-money. Disclaimer Much of this weekend's update is devoted to what could occur in some major themes going into the traditionally bullish 4th quarter of the year. None of it is written in stone. The market travels to the beat of its own drums and all we can do is listen out for familiar patterns, recurring tendencies that lend themselves to trading those bigger themes. It is that uncertainty itself that creates opportunities like those described above. We exit option trades at a 50% loss from our entry premium, no questions asked. It preserves our capital and allows us to take that next confirmed opportunity which, like clockwork, always seems to come around just when we least expect it.
