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???? is making a very bullish breakout above technical and psychological resistance at $1. The huge spike in volume today indicatates that it is likely to continue higher from this dollar area. Along with a postive fundamental outlook this is a recipe for profits in my book. ???? released very strong earnings which sparked this rally with some of the highlights as follows.

Revenue Increased 167% to $7.2 Million; Net Income Up 1016% to $2.0 Million -

“Our sterling performance in the third quarter demonstrates our ability to increase sales quarter-over-quarter and achieve profitable growth. Our revenue growth and substantial increase in net income are based on a number of factors, including increased customer demand for our products, expanded production capacity and stricter cost control.”

“For example, we started batch production for “……..” in February 2008 and expect to secure our first order and begin production in May of 2008. Based on our current and projected customer base and product lines, we are on track to more than double our revenue and net income for the full fiscal year 2008 compared to fiscal 2007.”

Technical Analysis:
As price is extended there is always the possibility of a pullback from here. But this is a very bullish breakout on heavy volume signaling that bullish momentum is very strong at this point. So i want to buy a 1/2 position Friday to catch the train if this runs big, as well as limit risk on a pullback so that i can average down if it does occur.

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AOB has been in a Steady downtrend since it highs its recent highs around $14/share in late 07′ as the market has been unsteady most of 2008. Although it appears that after this negative momentum China looks to be making a rebound as a whole and along with it the undervalued growth stocks such as AOB.  After hitting lows near 7 or a 50% drop from its highs in late 07′ AOB made a strong rebound while forming a bullish ascending triangle that broke out Thursday on increased volume suggesting continued bullish momentum from here.

Fundamentally AOB looks cheap among its peers in the biotechnology industry currently trading at a low P/E of just 14x earnings compared to the industry average 22x. Looking forward analysts are expecting continued strong growth for AOB of 1.02eps in 2009. Given these estimates we could give AOB an estimated fair value within its industry of 22.47/share found by multiplying forward earnings of 1.02 x the biotech average trading multiple of 22.03. Given that AOB’s fair value within its industry is 151% above its current share price of 8.95 this is a very appealing investment. I took Thursdays breakout as an opportunity to go long AOB.