Intertainment Media

I've been asked by several members to comment on the recent activity with Intertainment Media, a start-up tech company that has pretty cool software. They have a product called "Ortsbo" (or robots with the letters mixed up) and they have achieved some pretty impressive metrics since they launched the product in July of 2010. Check out this recent press release from them "Intertainment's Ortsbo Real Time Translator Reaches 60 Million Minutes of User Engagement". Some people are going as far as calling this the next Facebook application to hit the Internet.

If you were fortunate enough to get in when it was just below $0.20, you were sitting pretty happy when it hit $0.96 for gains of 380% so far and it looked as if it might just keep going with all the hype behind it. And then they publish a press release indicating that they might spin off a separate company listed on the U.S. stock exchange for the Ortsbo software which would leave the Canadian share holders with little interest in it... "Intertainment Media Receives Offer for US Public Listing of Real Time Social Media Translator ORTSBO.com". Canadian investors didn't like the sounds of that and started the sell off. Share price has done a full 50% FIB retracement in the last 4 days.

But enough of the Fundamentals for now and let's take a look at the Technicals...

First, let's take a look at the daily chart and I've added fibonacci retracements levels to the chart. If you look at the indicators you can see that RSI has hit 100 (way overbought) but the Slow Stochastic has not really peaked and has started to turn downwards a little. It is still above 50 and could potentially turn upwards again, but is nearing the "I don't know" zone. The overall trend as indicated by the ADX has perhaps also peaked and is turning downwards. Share price has closed exactly on the 50% fib retracement line and dipped slightly below with a look see at $0.51 during the say. This is where there is major support on the daily chart. When it started to dip on Wednesday, this is the target I started calling for. First $0.56, then $0.53 and finally on Friday I thought we might see $0.50 on it. $0.51 was the lowest.

So for now $0.53 has to hold on the daily chart. Failure here will bring us to the next FIB retracement line which is the 38.2% line on the chart and that's at $0.435. Volume has been diminishing for the last four days placing Friday's close well below average volume.

The chart pattern evolving on the daily chart is not easily identified until you take a look at the 30 min intraday chart. It becomes pretty obvious what pattern is developing there. A Head & Shoulders pattern. I've highlighted the pattern with red pointing arrows on the intraday chart below. We can clearly the support levels and where the flippers have been playing this stock. A flipper is a trader who buys a bunch of shares and sells them a cent or two higher and repeats this process several times through out the day. To be politically correct, I should be calling them day traders. LOL! Nothing wrong with them and they make good money doing this. Although I am more of a swing trader, I myself have found myself doing it more and more these days.

If the intraday chart continues as formed, we should see a move upwards early next week to the blue resistance line at $0.63 which would form a nice symmetrical head and shoulders formation. But nothing is always that perfect... I think its going to be more of a slanting head and shoulders which means we should see the next resistance line at $0.70. The reason I say this is because if we start to move upwards again on this stock, interest is going to come back into it and quickly move the price upwards. Remember, this is the next best thing to Facebook to hit the internet! So the move up I indicated as an orange line to the first resistance level. If the symmetrical head and shoulders forms, then the down leg will be the last red arrow on the chart and might brings us near $0.30 following the down trend line. On the other hand, to invalidate the pattern we would have to see the initial move up to $0.70 with volume building up and a continuation above that resistance level. This would place the stock into the $1.00 range again and will continue onwards.

So for those who have not played yet with this stock, there's still an opportunity here to get in and potentially see a double in no time at all. The key point is to hold the 50% FIB retracement like on the daily and not let it go below support on the intraday.

See here for charts: http://us1.campaign-archive1.com/?u=4d6d491aea8e01d93d8a1f390&id=384608da49#INT

Cheers!