FortuNet (FNET)

Company

"FortuNet, Inc. is a licensed Nevada gaming equipment operator, manufacturer and distributor. FortuNet pioneered electronic bingo networks and multi-gaming networks in the eighties and currently manufactures and distributes its patented BingoStar® network to bingo halls and casinos throughout the world." (company website)

Sell short

21-Dec-06. In mid-November, FortuNet reported earnings and noted that revenues were growing at double-digit rates. The Market was clearly not impressed. Since then, the 50-day moving average has turned down. Although the price has risen to where it was at earnings time, it failed to pierce that level and has now suffered three consecutive down-days. To me, the chart looks like The Market has voted "no confidence" in FNET.

• Price momentum (PPO) — was increasing but has just started to slow again
• Trend (ADX) — very strong, but leveling off, and buying pressure (+DI) has begun to fall while selling pressure (-DI) is rising
• Money flow (CMF) — money has flowed out of the stock most of the past three months
• Relative strength (RSI) — has fallen to neutral, and the more-sensitive stochastic RSI is pointing down
• Volume — average volume has fallen by half over past three months

Sell

29-Dec-06. The stop-loss order to cover FNET was triggered by this morning's rally. The chart for this one is sending very mixed messages. On the one hand, momentum (PPO), trend (ADX), relative strength (RSI), and money flow (CMF) are all improving. On the other hand, average daily volume is dropping noticeably and is now a mere fraction of what it was three months ago. The maxim is price follows volume, but it's certainly not true in this case.