Catuity (CTTY)

Company

Catuity Inc. makes the point of sale more profitable for its customers by delivering products and services which reduce costs and generate new revenues. Our retailer clients have more than four million cardholders participating in Catuity-powered loyalty and gift card programs. (company website)

Buy

6-Dec-06. Catuity's long slide ended in October when the company reported quarterly losses much narrower than in the previous year. The 50-day moving average has turned up and CTTY is now trading above the falling 200-day moving average.

• Price momentum (PPO) — picked up smartly in late November, now leveling off at high level
• Trend (ADX) — very strong, with buying pressure (+DI) well above selling pressure (-DI)
• Money flow (CMF) — moderate inflow
• Relative strength (RSI) — much stronger now than three months ago, but has moderated slightly during recent pullback
• Volume — lightly traded, but much higher than normal volume on price jump above 200-day moving average

Sell

13-Dec-06. So much for "strong upward trend" — Catuity is down more than 7% on the day, and my stop-loss order triggered. Trading was light, so there was a larger-than-normal gap between the Bid and Offer prices.