Max - IFCI and others - looking for breakouts.
>>gee whiz look at that,and without any news--and the stock was struggling before
today--5-day chart quote.yahoo.com <<
Good karma here perhaps, IFCI did just what I wanted it to when I wrote this post:
>>IFCI - I am buying at $6. International Fibercom is near its lows and has bounced off the 5-6 level strongly several times in the past. Co operates in what is a "hot" field these days, yet has a low P/E. Has shown very narrow price swings lately, looking for a breakout, with little downside.<<
the link to that post:
www3.techstocks.com
This was similar to the action with NBTY. This is what I wrote on 4/29:
>>I think NBTY qualifies as a "recently beaten up and left for dead, issue" Here's why:
Chart: The stock was over $20 last July. It has fallen, now below $5, a level not seen since 10/96 (full-year sales for 1996 were $194 mil., sales for the most recent quarter were $168 mil.) The stock has "flatlined" since March, and has stopped reacting to bad news. Downside would appear minimal...the long term prospects are good. It would seem like a safe stock to hold with the possible expectation that when they gear up their Internet sales, the stock could jump.<<
The link to that post is:
www3.techstocks.com
and a stock chart, showing the jump in price shortly thereafter:
quote.yahoo.com
What's the point? I think a useful strategy is to look for stocks that have fallen and then "flatlined" When a stock chart shows a very tight daily range, when it does not react to negative news, it can mean the selling is over and that a breakout to the upside is possible. Of course, they must be companies that still have future potential - expanding markets, improving demographics, etc. This is not a suggestion for daytraders, but could be a useful place to park some money with limited risk while waiting for an upside.
Anyone agree? Disagree? Should we pursue this strategy further?
Next post, a similar strategy - buying on a breakout.
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