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Biotech / Medical : IMNR - Immune Response -- Ignore unavailable to you. Want to Upgrade?

To: kenneth kountz who wrote (1042)	9/4/1998 10:36:00 AM
From: John S. Baker	Read Replies (2) \| Respond to of 1510

I am by no means a technical expert, but there are some indicators which the experts say indicate accumulation or distribution. One is called On Balance Volume (OBV). Each day, you attribute the total day's volume either to "up volume" or "down volume" and keep a running tally. Thus, a high volume up day in the market would increase the running OBV tally more than would a low-volume up day. Leedom's proprietary system is an outgrowth of OBV. A step more sophisticated is Money Flow Indicator (MFI). Rather than assigning the entire day's volume to either the up or the down column, MFI keeps the running total going during the trading day on a volume-weighted basis. Thus a series of 100-share trades at 8, 8 1/2, 8 1/2, 8 1/2 would produce MFI increments of +50 (for the change of 100 shares from 8 to 8 1/2), 0, 0, and 0). The net MFI would be +50. MFI netted over time can give a pretty decent indicator of the accumulation or distribution of a stock. On a macro basis ... say, over a month or two ... a rising MFI whilst stock price stays constant suggests that accumulation is taking place. Some technical gurus argue that MFI is less accurate at suggesting distribution, but I take a MFI bailout pretty seriously anyway. See ESSI on the Leedom charts for an example. Heeding the bailout there as a caution signal would have saved a good bit of money as the stock tanked recently. A still-higher level of precision is offered by the DAV line, where DAV stands for "Distribution-Accumulation Volume" (I think). This reflects netted uptick and downtick volume but only for "large trades". Small trades are ignored. The choice of what constitutes a large trade varies from one stock to another. Most days there are several trades of a million shares of INTC or MSFT. But for IMNR, a large trade might be anything over 2,000 shares. (Generally, I begin experimenting with a trade size which includes 2/3 of the daily volume ... and then try adjusting up or down.) I made up a spread sheet program which permits me to load in "time and sales" reports for a stock each day and which then determines the DAV amount for the day. I also can vary the threshhold value for consideration. I plot three things on the same chart: DAV (reflecting only large trades), OBV (reflecting all trades), and closing price. Often one of the first indications that somebody, somewhere is accumulating a stock comes in a diversion in which the DAV starts going up while the price and OBV stay relatively stable. I am told that people who watch the tape ... every single tick during the day ... can interpret it as to accumulation or distribution too. I think this is done by checking whether the transaction occurs at the "bid" (reflecting selling pressure) or at the "ask" (reflecting buying pressure). I haven't the time to do this, so I have opted to use MFI and DAV as substitutes. There are two sites which compute some of these values automatically fro you (except DAV) and which offer better explanations than mine. One is at bigcharts.com and the other is at tscn.com Check 'em out and play around with them and you'll be amazed at what you can find. Caveat: I am basically a "value investor" relying on fundamentals and I use TA only to fine-tune my entry and exit points. Happy Due Diligence. JSb.