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No. of Recommendations: 7
Anne (Comptche) asked me to do an analysis of IDNX using my TA system. If you interested, here it is. If you don't want any more TA posts on this board just let me know.

Okay, let's look at IDNX. First pull up this chart and look at it carefully.

http://finance.yahoo.com/q?s=IDNX&d=c&k=c3&a=m26-12-9,r14,v&p=e50&t=6m&l=on&z=m&q=l

The problem here is that the buy signal really didn't come until Sept. 17th, when the market reopened after the terrorists attacks on 9/11.

Take a look at the prices and volume in tabular form from mid August until now, (link below)

http://table.finance.yahoo.com/t?a=08&b=12&c=01&d=12&e=14&f=01&g=d&s=idnx&y=0&z=idnx

Using my system, I would have bought sometime during the day on Sept. 17th. The stock opened at 8, got as high as 8.50 and as low as 6.25 and closed at 7.20. Without seeing the intraday trading, it's difficult to say when I would have bought, but for the sake of argument let's say it was at 7.25.

I usually use my Merrill Lynch Account to check on a stock's beta, but it doesn't show up if the market is closed, so as I write this I'm not sure what the beta is for IDNX, but's let's assume it is over 1.4, so I'll use 12% for my stops. On Sept. 17th, when it closed at $7.20, I would have set a stop at 12% lower than my purchase price, or $6.38.

I would keep my stop at $6.38 until IDNX got 15% above my purchase price (or $8.34), when I would start raising my stops. It closed at 8.75 on 9/24, so I would have raised my stop loss to $7.70 on 9/25. It closed at 9.99 on 9/25, so I would have raised my stop loss to 8.79 on 9/26. On 9/26 sometime during the day it hit a low of 8.64, so I would have been stopped out at $8.79. 8.79 (sell price) - 7.25 (purchase price) so I would have had a 21.2% profit in a little over a week.

Now let's carry it further.

IDNX went down to close at $7.75 on 9/27, but then started back up. However, if you look at the RSI during the first two weeks of October, it was declining significantly, so I wouldn't have bought. The next buy opportunity (where the price was 3% abover the 50 day EMA, the RSI was rising over the past month, the MACD was positive, and the Volume was 40% the ADV) came on Nov. 26th during the day. Take a close look at the chart below and see if you agree with me. Also, you may need to print out the price table link above to follow the prices in tabular form.

http://finance.yahoo.com/q?s=IDNX&d=c&k=c3&a=m26-12-9,r14,v&p=e50&t=3m&l=on&z=m&q=l

So, I would have bought again intraday on Nov. 26th at somewhere between $8.00 and $8.50 let's say it was 8.25. I would then have immediately entered a stop loss at $7.26. I would keep my stop loss at 7.26 until the stock rose 15% from my purchase price (on the close), so I would be waiting for the stock to hit $9.49, which it did on Dec 10th (closed at 10.35). On Dec 11th I would have raised my stop loss to $9.11. On Dec 12th it closed at 12.37, so I would raise my stop loss to 10.89. On Dec 13 it closed at 13.93, so I would raise my stop loss to 12.26. On the 14th it closed at 13.77 (which is below 13.99), so I would not adjust my stop loss order, I would keep it at $12.26.

Obviously, we have missed the breakout on Nov. 26th where we should have bought at 8.25 (or thereabouts) and we would now be up 70%, with a stop loss guarantee at 12.26 ( a 48% gain).

Whether you should buy it now or not is difficult to say. If you do buy it, you would enter a stop loss 12% below where you bought it. From a technical standpoint it is definitely okay to buy, as the MACD, Volume and RSI are all okay, but obviously we missed the ideal time when my system flashed the buy signal on Nov. 26th.

Hope this helps.

Nukejohn
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No. of Recommendations: 1
Hi NukeJohn,

Thanks for the detailed description of IDNX. The details are like a lesson, easy to follow and a good exercise to get to know the intricacies of your method. You answered one of my major questions about whether or not to buy in after the "ideal" trigger time has passed. The reason I asked that question is that ClearStation sends out email messages about recommended Longs and Shorts. The message about IDNX came after the "Ideal" trigger. I wonder how many of their alerts come out after that time and I'm going to watch to see how they perform according to your method.

Thanks again for all the trouble you went to to explain this in detail.

Anne
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No. of Recommendations: 0
Hello:
Yes, we want you to continue your TA discussion! At least this mostly lurker does. If you decide to move to another board, please let us all know.
Questions:
IDNX wass suggested by someone else. What others are you watching, and how did you find them? Have you found any serious drawbacks to your system?

Haven't always followed this board, and may have missed some of your advice.

Huge
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No. of Recommendations: 1
IDNX wass suggested by someone else. What others are you watching, and how did you find them? Have you found any serious drawbacks to your system?

Haven't always followed this board, and may have missed some of your advice.


I would prefer not to share my complete watch list. Suffice it to say that if you read my interview in my profile, you will know the types of companies I watch. They are mostly tech companies that I consider to be potential Rule Breakers and/or Gorillas (if you're a Gorilla Gamer). I look for companies with a unique competitive advantage that I think will lead to virtual competitive monopolies in the next 2-5 years.

One of my favorite boards, where I am mostly a lurker is the New Paradigm Investing board:

http://boards.fool.com/Messages.asp?bid=114933&sort=recommendations

Read the top ten recommended posts and you'll see what I mean. A lot of extremely bright technology people frequent that board. I just put their stocks on my watch list, and follow the technicals.

If you are really interested in my system, drop me an email if you have any specific questions.

NukeJohn
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No. of Recommendations: 0
Hello nukejohn:

Thanks for the info. I checked the New Paradigm Investing board and have added it to my favorites list. Thanks also for the email offer.

Have also read your profile and interview, and copied your TA system from the link found in the interview. It looks good to me.

Thanks again.

Huge
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