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APDN - Social Chatter An Example Of Chatter Reversals

Apr. 13, 2014 7:46 PM ETAPDN1 Comment
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Seeking Alpha Analyst Since 2014

Respect Gravity is a small software company in Atlanta, Georgia focusing on data analytics, data mining and modeling for use in predictive marketing and event forecasting. Consisting of former professors, software architects and the best minds in data mining and finance.

We discussed yesterday the use of two proprietary metrics that we call "chatter" and "toxic chatter". These are arrived at by analyzing the social media and punditry spaces on the internet and media via semantic and other forms of analysis.

Today, we present an analysis of APDN.

Here you will see a graph of stock price, "chatter" and "toxic chatter". For a some time the total chatter on this stock was positive but as you can see over the last 5 months there has been a reversal of sentiment. On November 11th, the "toxic chatter" breached the overall chatter for the first time. (The red line went over the green line). This is our traditional sell signal. This event transpired when the stock was at a pps of $0.11 a value the stock has now slipped below. The buy signal on this stock was at 0.08 and this is a nice, but not great, return of 37.5%.

What is most interesting is that since November 11th the preponderance of days the "toxic" chatter has weighted higher overall. You can see this polarity change on the graph. Another, tidbit is there is always "toxic chatter", on every penny stock, but prior to December the average value was very low. Whereas over the last 5 months there is a constant background of it.

We will see what happens but for now we are just watching.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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