Time To Be In The Minority - Looks at MNKD, BMGP, and RPTN

The crowd may push stocks higher or lower, but that doesn't mean the crowd's always right. And, you don't want to be caught in the wrong side of the table when the crowd catches its mistake. With that in mind, I've got two reversal ideas for you today, but I want to start out by putting a solid setup on your watchlist.

I'm not crazy about the bullish gap from MannKind Corporation (NASDAQ:MNKD), as it may prove to be the disruption to what was going to be a bullish chart pattern. Still, I think there are some curious and telling details of this chart that any interested party would want to note.  

For starters, gap or not, MNKD once again hit a headwind today at its 100-day moving average line (gray). This may well be the insurmountable hurdle for this small cap stock, negating the need for any other discussion.

On the other hand, if MannKind Corporation can clear the 100-day line at $6.80, there's a real shot at an upside-down head-and-shoulders (bullish) breakout. Oh, the neckline at $7.32 will join up with the 200-day line (green) around that level, and will possible halt any advance dead in its tracks. Given the opportunity for an explosive move beyond that line though, MNKD is definitely worth keeping tabs on over the next few days. The bullish storm's brewing - it just needs a chance to be unleashed.



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I don't know what it is about Raptor Networks Technology, Inc. (OTC:RPTN) that keeps me coming back. I just know for some reason this small cap keep landing on my bullish radar.  And well it should - it's back above the 200-day line today (to the extent that matters for a sub-$1.00 OTC stock), and it's itching to make yet another higher high in this long string if net-bullish ebbs and flows (framed in blue).

In any case, Raptor Networks Technology showed up as a 'most bearish' stock among message board users today.... and you know how I love a good contrarian play. I'm sure someone loaded up with a big short position of RPTN after the late-June pullback, and is now getting worried because of the downtrend's stall, and the testing of bullish waters. The louder they scream 'sell', the more desperate they are. The squeeze is on; time to buy.



Is the party already over for Biomagnetics Diagnostics Corp. (PINK:BMGP)? I think so. Not that I have a problem with pump jobs of small cap stocks, but the way the rally stalled over the last two days is the problem with the pump - once the shouting stops, so too does the buying. It goes deeper than a mere stall though.

Take a real close look at the bars for the last two days. BMGP has made its second gravestone doji, where the open (and close so far) is at the bottom of the range. It indicates that the bulls are struggling to spur any further gains, which is generally an omen that the torch is being passed to the bears. Factor in how the accumulation volume actually dried out on the way up, and Biomagnetics Diagnostics is a huge pullback risk at this point. Time to get out while you can.



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