Thursday, January 01, 2009

Two thousand and nine predictions

Let's start with the bigger picture technicals, beginning with a weekly chart of the DJIA:

The last six weeks of 2008 saw the DJIA creep sideways in what appears to be a wedge formation, suggesting that in the first week or two of January the market will either break up out of the wedge and carry all the way to 10000, or conversely break down out of the wedge with an initial target of 7000. Despite the apparently conflicting nature of this analysis, it does provide a road map for the next couple of months, based upon the market's behavior over the next two or three weeks.

Staying focused on the DJIA, the Triangles on the weekly chart are barely clinging to a Buy signal from three weeks ago. A hard break of the 8400 level will likely trigger a Sell signal. Thus on both the EW chart and the Triangle chart, any significant weakness directly ahead will likely generate a tradable decline to new 52 week lows.

Note how on the above chart the same wedge appears while the MACD seems to be making a bullish crossover, suggesting a move upward toward the declining moving averages, again at about 10,000-11,000 basis the DJIA. Any decline now, one that nullifies the bullish crossover, would trigger a very bearish "hook" on the weekly MACD.

Enough with the ambiguity? Sometimes that's all the market offers and now is one of those times. But it can't hold it's cards indefinetly, the next significant move is one that can followed with some confidence, whether up or down.

My Number One Pick for 2009

During calendar year 2008, NNVC rose 100% from 0.40 to 0.81 at year end. That included a trip up to the 1.78 level mid-year, a drop back to the 0.40 level late in the year and a year end rally back up to close the year at 0.81. The chart below shows the journey on a daily chart with my own EW wave count superimposed. If I am right and NNVC is about ready to blast off in a wave 3 rally, last year's 100% raise will seem like chicken feed.

Chicken feed? Is that some kind of allusion to bird flu? You betcha. Here's a link to a daily news feed on Avian Flu cases as they are reported from around the globe. This is scary stuff and Southeast Asia seems to be on the cusp of massive bird flu breakouts. Last time that happened NNVC was put on the map, rising from 8 cents to 3.75, just on bird flu speculation. In the three years since, NNVC has continued to cultivate its "hit list" of viruses subject to eradication through NNVC's targeted anti-viral therapeutics.

NanoViricides, Inc. is a development stage company. The Company's novel nanoviricide™ class of drug candidates are designed to specifically attack enveloped virus particles and to dismantle them. The Company is developing drugs against a number of viral diseases including H5N1 bird flu, seasonal influenza, HIV, Epidemic Kerato-Conjunctivitis (EKC), hepatitis C, rabies, dengue fever, and Ebola virus, among others.
--from NanoViricides' web site

In a year when the major market averages dropped 40%, NNVC rose 100%. NanoViricides is three years further ahead in their development from when sheer speculation alone triggered a rise of over 4,000% in market cap and share price. A similar rise from current levels would lead to a share price of over $32/share. Factor in all the other targeted viral diseases and it is mind boggling what is possible here.

Yea, I'm pounding the table once again on NNVC.


Above is a chart of the XAU Gold Mining Index. This chart bears watching very closely as superimposed upon it is an aggressive EW count suggesting that gold stocks are in the very beginning of a new bull market. The XAU could easily double in price if this wave count is correct and then it would only be the first wave up before a consolidation leads to even more spectacular gains.

Supporting the bullish XAU chart is the Triangle chart on Gold, showing a late November BUY signal followed by a robust rally.

Finally, this weekly chart of XAU shows the recent strength was enough to break out above a 10 month down channel, a fresh MACD Buy cross-over and no real price resistance until over 200 on the index, a near double from current levels.

2009 Summary

The market is going to be volatile no matter what direction it goes, but a major bear market has asserted itself and until proven otherwise, that's the course of future prices. My best pick for appreciation this year is once again NNVC and it is not too late to buy this stock based on where I am suggesting it can go in the years ahead. Finally, Gold and Gold Stocks may be my next best idea if the rally from the late October lows extends on the heels of geopolitical and domestic economic cycles that are running the scary side of miserable in the current global environment.



Anonymous said...

Gold is still being heavily shorted by commercial traders. If they are wrong, and that would be unlikely, one might expect a vicious short-covering rally.

Anonymous said...

Lol. Right allan. Much like your GFRE pick. You're sorry you missed out on unloading NNVC when it was over $1 and now you want out. I get it. I'm all in for nothing else but to make a quick flip. Thanks!


Tapan said...

Hi Allan,
Thanks for the tips. Are you considering NNVC for a short term 1-2 month horizon or more?
Trade triangle for weekly charts shows a buy but daily is a sell.

Anonymous said...

Happy new year Allan,
now that 2008 is behind us while waiting for nnvc to make something b4 new year.
Would it be better now to trade with 1/2 the shares and leave the rest for any outcome?

Anonymous said...

Happy New Year Allan!

Wishing you and your blog readers the very best in 2009!

- Shyam

violinbf said...

GFRE is now up from 22c to 34c...that seems like a good pick to me. Nevermind there are nothing but perfect numbers from this company. This should be more like a 2.00-3.00 stock.

Allan said...


This is a longer term buy and hold tight stock, be fully invested in it from the get go, don't trade it, don't try to be cute with it, hang on for the ride of a lifetime. Clear enough?

Anonymous said...

Hello Allan, following you since NNVC at .08....Not a plug altho I have bought in...GNTA.....Cancer Drugs..high of $85 5 years hit a month or so ago...Market Cap about 125k....seems to be a chance at another NNVC ?Any thoughts? Thanks, Gary

Anonymous said...


Make a new prediction....How many times for 2009 do you predict that you will have to tell readers NNVC is a for sure buy/hold PERIOD?

I'm saying 22 (plus or minus 3).

-PSU Eric

betsalel said...

Hi Allan,

What do the trangles (daily,weekly) say about NNVC after today's news and bounce with volume?

Harvey B.