I continue my foray along the Dark Side, trying to sort out my head from my tails in technical analysis.
Here's an interesting one: IDH. It gapped down 18% yesterday, after releasing its latest IMS. It makes diagnostic test kits. Revenues were up from 35.4m to 39.4, for the year. The gist of the concerns seem to be that everyone is thinking the company has gone ex-growth. They are facing increasing competition in their non-automated tests. Their IDS-iSYS test, which is automated, is holding its own, and the company expects to keep investing in new product development, in which is sees a significant unmet market need.
The shares traded near a high of 1200p in Jul 2011, and have been in downtrend since then. They stand at 292p. RSI is below 30 - suggesting that the shares are oversold. This, combined with the gap-down on high volumet yesterday after a significant downtrend suggests that we have just witnessed an exhaustion gap, and now is a good time to buy.
The company has a market cap of £83m, is on AIM, on a PER of 6, and has net cash of £3.3m. So even if it has gone ex-growth, the low PE gives some protection.
I own no shares in IDH, BTW. I'm just learning technical analysis, and just rambling. So caveat emptor.