Monday was news wise quiet for Imaging Diagnostic Systems, Inc. (OTCBB: IMDS, IMDS message board or IMDS.OB), however the stock rallied significantly on a technical basis. A breakout added over 70% shortly into trading.
The current situation might be played for fast money. Volume is quite impressive compared to other days and both 8 and 20 days moving averages are heading up. Looking at the CCI indicator we see it went above 190 confirming the price is likely to travel even further. Basically we want it to close the day with this large bullish candle and wait for tomorrow's action with limit orders placed.
On Tuesday we should see a price retracement of about 33% of the current strong bullish candle and it should happen on lower but still significant volume. Putting a limit order somewhere around $0.0144 would be a perfect entrance (if stock moves higher than $0.0169, adjust accordingly). Following this strategy the order should get filled in the coming 3 days while the price fluctuates. If it doesn't, it means the situation hasn't been confirmed.
If the candle won't retract at the end of Monday trading it might be possible to make up to 10% profit in just a few days afterwards. Of course one should remember to put stop loss orders as this is a penny stock we're talking about and even the most bullish signals.
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