Chart Chat: INBK

We don’t trade on charts here and it can be a bunch of mumbo-jumbo, but if everybody believes in something it can be a self-fulfilling prophecy, so I like to pay attention.

http://stockcharts.com/freecharts/gallery.html?inbk

One of the signs of a top is a day where you shoot to a new high and then lose it all and more. That is what happened to INBK on Monday. At that point you want to become a little cautious - at least not add for a bit until you are confident it has not peaked. Oddly, this was on the big up day yesterday, so you might have expected it to stay up along with the market. The fact it did not and the fact it failed to do so on high volume is a flag. Just a flag, but one to watch. I had initial optimism today when it was flat in the morning while the market was down. But now it is down about 3.5% on high volume again. (Though it was down even farther). I am not saying to sell (never listen to me if I do), but be very cautious adding here. The overall market looks like it has turned. 7 down days seemed to be overturned by a huge day yesterday, but today we continue down. A ton of earnings are in, China is in trouble, the Fed will raise soon. There is “always” a summer swoon. August is “often” bad, etc.

There will be good opportunities over the next month, today does not have to be one where we catch a falling knife.

On the other hand, we continue to see great strength after earnings, totally ignoring the market.
http://stockcharts.com/freecharts/gallery.html?abmd

SKX is showing strength with sideways movement as the market plunges
http://stockcharts.com/freecharts/gallery.html?skx

Same for BOFI
http://stockcharts.com/freecharts/gallery.html?bofi

These are the kind of chart patterns that show strength and the conviction of the big boys (to not sell). So when the market is done puking, this is where we look first. Strength begets strength.

CRTO puked on earnings and has settled
http://stockcharts.com/freecharts/gallery.html?crto

AMBA has had an nice orderly (low volume) correction after a double-top. It is touching the 50dma but has not gone below it in a long time. Strength. Keep watching this one closely for when the market is done.
http://stockcharts.com/freecharts/gallery.html?amba

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Thank you for the charts and notes on these tickers and the urging to be cautious here. This from a pretty patient and careful guy here when it comes to buying small cap stocks especially small cap tech stocks. That patience has paid off very well over the years.
I am sure it has been said numerous times but I second the idea of using some caution and not going for the “all in at once” approach. Spread your purchases out in portions of a starter position and then 1/4 positions or so after that. Greed is a portfolio killer and must be dealt with constantly and firmly!
Carry on…

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Well INBK recovered through the day to end up at 35.31 - down only 1%, which was a big claw back.
A

This stock is so illiquid, I don’t know if I’d give short term share price fluctuation much credence.

I bought another 200 shares on August 7th and the stock price jumped from $36.11 to $36.70 and stayed there for a good 15 minutes before dropping down.

The guy who momentarily boosted the price to $39.76 and change on August 10th probably purchased a small amount like a thousand shares or so before it sold off.

The volume has doubled over the past couple weeks, but when ‘high volume’ is only 45k shares, the bid/ask spread is going to create some volatility.

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This stock is so illiquid, I don’t know if I’d give short term share price fluctuation much credence

Correct, but we are looking for the start and continuation of a pattern. Patterns repeat because human emotions repeat. Greed & Fear. Every great growth stock will eventually slow down, then a lot of people will move to the next great growth stock, sometimes very fast. In those cases a stock can be “done”. We see Saul do this all the time, right?

So I am just saying “see if this is the beginning of the end”.

Given that it stabilized yesterday while the market was plummeting and it is is flat so far today while the Naz and DOW are down more than 1%, then it seems the recent earning are enough to keep the growth investors in. Don’t expect any news other than the market.

We are now watching which of “our” stocks hold up well as the market crashes. Sure, most should go down, but some will go down a lot and some will hold relatively steady. That tells you which to add money to when the market is ready to turn.

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