Weak try at some technical analysis.
Up until three days ago the chart of IMMD was tracing a beautiful saucer-shaped formation. The left side was built in the period of 12/95-3/96 when the stock reached its all-time high of 3.875 in intraday trading. Since then the pattern had been a murderous downward sloping curve that took the stock to a bottom of .3125 in April of this year. Normally these formations tend to reverse themselves in the same fashion; that is, the curve reaches a plateau at which the stock flattens out (the bottom of the saucer) and then turns upward; sometimes gently, sometimes a little faster.
Ain't nothing normal about IMMD's price/volume action of the last 3 days though. Volume up from 400 shares on 6/2 to 1,116,000+ on 6/10!
As for price, the stock gently broke thru its 50-day moving average back on 5/6 and had been holding above it. However in the last two days the stock simply SHOT through its 200-day moving average, at the same time it shattered its first resistance level of .72 established back on 12/6. This kind of action is simply jarring. NO more gently sloping saucer-shaped chart here, mi amigo.
What I did not like about today's price action was the effective "one day reversal" that took place. This is when a stock opens at a price,(.8437) reaches a higher high during the day (1.0625) on very, very heavy volume and then closes below its opening price(.75). And IMMD is no stranger to these one-day reversals. Let's look at'em:
On 3/4/96: Open 3.75; Hi 3.875 (all time high); Clos 3.3375 and the stock hasn't seen $3 since. On 6/12/96: Open 1.9375; Hi 2.125, Close 1.625 (and we haven't seen $2 since). On 10/28/96 and 10/29/96, a 2-day reversal: Open $1 Hi 1.25 Close .82 (and we hadn't seen $1 until today, briefly). You get my drift?? Everyone of these price reversals was the precursor of lower prices. So...have we broken the pattern? Don't know. But one thing you need to watch for is if the stock breaks its next resistance level ($1.25 established almost 7 1/2 months ago, 10/28/96). If we do, the path of least resistance may well be up and any piece of good news may send the stock to the next level of about $2/share. Here's hoping that's the case. J. P. Antelo (the good looking J.P.) |
