Just for the record, yes, I was the same guy who two days ago was telling you to bail out of Intellicheck Mobilisa, Inc. (NYSEMKT:IDN), locking in whatever gain you could on the falling stock while there was a gain to be hand. So why am I calling IDN a buy now? Because my bearish worries were from two days ago... a lifetime, in trading terms.
As a reminder, Intellicheck Mobilisa makes security software for mobile devices. The big runup through the end of Monday (a 225% rally in less than two months) was leading right up to earnings news that was unveiled on Monday after the close. Almost needless to say, the market was disappointed with what it heard. What does need to be voiced, however, is the reality that IDN shares were doomed no matter what last quarter looked like. When you're sitting in the shadow of more than a 200% rally in less than two months, any would-be buyers are already in; there are no buyers left. And, with people paying the kinds of crazy prices they were paying during the latter half of the rally, there's no way to argue that expectations weren't wildly high. That's what they paid what they paid for Intellicheck Mobilisa. In retrospect, it was obviously a big mistake. Shares opened the next day well in the red, and proceeded to sink further, all the way to today's low of $0.88... from Monday's peak of $1.79. Ouch.
If the $0.88 seems familiar, it may be because that's where yours truly suggested IDN would find support and likely begin a reversal. [I actually said $0.87, but I'm willing to budge a little.] And as you can see on the chart below, the reason I pegged that line as a big one is because it's been support as well as resistance lately. That's not about to change now.
So what? The "so what" is, the Intellicheck Mobilisa, Inc. pullback seems to have run its course. It's a buy again today, as the overreaction from the sellers has set up a good possibility of a bounce from here.
And for what it's worth, this was never about - and still isn't - the company's fundamental performance. This is about the disconnect between IDN (the stock) and Intellicheck Mobilisa (the company). The triple-digit rally should have never happened, and the subsequent pullback wouldn't have been so harsh had the big rally not materialized. Now that the stock has shaken off all the excess - in both directions - it can get back on track and start to reflect its underlying value again. With a floor establish are $0.88, that should mean tempered bullishness ahead. It's reasonably safe to wade back in.
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