Nanophase Technologies (NANX)

Company

"Nanophase Technologies is an industry-leading nanocrystalline materials innovator and manufacturer with an integrated family of nanomaterial technologies. The entire focus of Nanophase is nanotechnology, with two distinct and patented processes for the preparation and commercial manufacturing of nanopowder metal oxides i.e. Aluminum Oxide, Zinc Oxide, Cerium Oxide, Titanium Dioxide, and several others. Nanophase Technologies Corporation has developed a process, Discrete Particle Encapsulation, to coat the surface of its nanoparticles with a thin polymeric shell that enables compatibility of the particles with a wide variety of fluids, resins and polymers. Also, Nanophase has developed technology to permit the dispersion of its nanoparticles in water and a variety of polar and non-polar organic fluids. This allows Nanophase to supply concentrated, ready-to-use nanoparticle dispersions, eliminating the need for customers to disperse the nanoparticles themselves. Nanophase’s family of integrated technologies economically produces nanocrystalline materials, and then nanoengineers those materials to fit a customer need." (company website)

Buy

14-Sep-06. I hope I don't regret this. NANX has been in a long downtrend (see sidebar) but appears to have broken the trend line: the latest pullback tested the line but did not break below it. The 1-month moving average is rising steadily, and until a short time ago so was the 50-day moving average. Since the earnings report, stock has risen quite a bit. MarketEdge had NANX a "strong buy" when I put in my order to buy if the stock closed above $6.50. Oops! Now it doesn't look that good.

• Price momentum (PPO) — still positive, but losing momentum
• Trend (ADX) — weakening, but still above the threshhold (20), with buying pressure (+DI) and selling pressure (-DI) almost balanced
• Money flow (CMF) — strong inflow, a good sign
• Relative strength (RSI) — neutral, and stochastic RSI showing stock is almost over-sold
• Volume — a bit soft, with daily average declining

Sell

21-Sep-06. It just wasn't happening with NANX. After my buy order executed automatically I had second thoughts, and it's clear I should have turned around and sold NANX a couple of days later at a profit when I had a chance.

The conclusion I think I'm being forced to is that certain of the indicators I use must be pointing up: price momentum (PPO), relative strength (RSI), and buying pressure (+DI). It's even better if the stochastic RSI is pointing up out of the over-sold area, and definitely not pointing down from the over-bought area.