Good evening readers. For those of you who had been buying up shares of Cord Blood America (CBAI) alongside me these past few weeks, you were pleasantly surprised to see the acquisition seems to have come to fruition after much anticipation. CBAI announced they acquired 51 percent of stellacure GmbH, the third largest cord blood banking service in Germany. I’m very happy that this acquisition finally took place and look forward to hearing more details over the coming days or weeks about what stellacure brings to the table in regards to current and estimated revenues/growth. With financials being released around the corner, roughly 3-4 weeks, we are sure to hear more details. I will be closely monitoring as I am very anxious to know more.
My first concern is that CBAI didn’t overpay for stellacure. Since Matt Schissler, CEO, finally reduced all the debt they had been carrying for so long, I don’t expect he would do such a thing. Secondly, we need to see some real details on exactly what stellacure brings to the table sooner rather than later. With the way Schissler updates frequently, I expect that won’t be an issue. Due to Schissler’s recent positive track record, I expect bullish financials as he seems to have worked hard to reduce debt and clean up the balance sheet. We have resistance around $.02 (see chart) so I’m looking for the PPS to jump towards $.02 again but it probably won’t hold or break it just yet without record volume. I’d look to reduce my position on a jump towards $.02 and on a pullback, I’d consider reinvesting more if my thesis stays intact with all the news coming out. Every stock has a specific timeframe which it makes the biggest gains and I believe we could be seeing some of its best gains shortly if Schissler has done his job.
Click to Enlarge
The volume was disappointing today and that won’t do much to help us jump towards $.02 so I’ll be sure to monitor it closely and trade around my core position to lock in gains and buy back on any oversold dips, if necessary. As more information is relayed to us, I expect us to finally receive the volume we need though. The MACD looks to be moving positive now and I will be looking to see it breaks away for a nice uptrend soon. Keep your eyes open as this one could become volatile anytime between now and financials.
In other portfolio news, Sirius XM (SIRI) bounced off $.80 and is now around $.88 which is also the 50-day moving average. Based upon recent moves on the chart, we could be starting a trend of riding up along the 50-day moving average but it’s too soon to confirm this. Volume is favorable and the MACD looks to be leveling-off so a possible uptrend is next. We will need accumulation to pick up though to sustain/fuel the move up. This is another stock to keep your eyes on because we already broke support at $.85 once so we need to stay well above it and start forming a strong support level here for the move to the $.90 range. If we move up very quickly without creating support levels, I will look to trim some shares off and watch for a pullback. I’m still expecting us to be over a $1 this upcoming quarter without any artificial help such as an R/S.
Click to Enlarge
Do your own homework to see if you agree and get some rest tonight. Be sure to stop in the live chat to say hello come morning. Good luck out there.
Mike
At the time of publication, Kudrna was Long SIRI and CBAI but positions can change at any time.
