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IBDvalueinvestin (99.67)

Momentum trap on IFLG, don't get suckered.

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July 12, 2010 – Comments (1) | RELATED TICKERS: IFLG.PK.DL

Many people when they see a stock soaring they jump on board hoping for more of the same. More often than not, the stock heads right back down, why? Basically because there was no real reason for it to soar in the first place and as such the market corrects the spike usually within a day or two.

1 Comments – Post Your Own

#1) On July 12, 2010 at 5:36 PM, allstarvulture (< 20) wrote:

Good catch, IBD.  Ths is the second time in the span of a month that this behavior has occured.  In the middle of June the price was pumped all of the way up to 8 (I red-thumbed it too early, but still socred some points on it), and it may be heading that way again.

What's happened in the month since that newsless pump and slow, inexorable decline back to the mid 4's?  They sold intellectual property (patents) for $2.2M because their cash position is so p*ss poor (6/15/2010), their accounting firm resigned (6/17/2010), and they engaged a new accounting firm on 6/23/2010 (note that this new firm, KPMG, hasn't formally agreed to be their auditors yet).  Since then?  Bubkus.

This has pump and dump writ large.  And if it shoots all of the way back to $8, I'll red thumb it from there. 

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