Decision Diagnostics Corp (DECN)

[Leirum]

An interesting observation from 2 other boards about the subject:

How much of the shares are possibly in control of some bigger Players?

Total of reported in recent filings: 6.1 Mio

Then one comment states: He knows more than 12 people isolated and not as group who control between $ 150.000 and $ 250.000 in DECN shares.

If we take an average this would amount up to 12 Mio shs.

Then another one in an U.K. forum writes that in his circle they are in control of even more shares. If so, we would have 6 Mio plus 12 Mio and 12 Mio and this would give a figure of 30 Mio shs plus or 66 % of the known O/S

One even writes, that those shares are held by professionals who finance(d) their purchases with proceeds from Options-Strategies playing the J&J stock. Means: Writing naked puts and naked calls and cashing in the high premiums.

I will try to go into this, to see, if there is some possible truth to all.

I for may part have no problem to believe them. What would be their benefit by playing figures if it would be otherwise.

1.) What is true, the options premiums in trading J&J shares are very attractive for professional writers. Comes to it, that J&J for the last 3 years was a options-traders paradise. The return on such collar strategies for the last 3 years where 38 % per year. Based on this, a simple margin of $ 500.000 up to $ 1 Mio would have returned $ 190.000 up to $ 380.000. So if this people are playing this market and in this case J&J and channelling the proceeds or part of the proceeds into DECN, then actually what the writer wrote sounds more than plausible.

2.) It is a known fact, that a lot of volume in the Penny-Stock market comes from such kind of sources

3.) Does the traded volume in DECN support this kind of statement done on 2 other boards.
You bet it does: The 3 months average volume of the last 3 months was 5.8 Mio shares and for 12 months 22.6 Mio shs. This shows, clearly that DECN is controlled by some bigger hands and has nothing to do with the small retail client. And if one is looking at the WEEKLY Accumulation/Distribution indicator, it is more than confirmed. The biggies have enough liquidity to average down and following the dilution part and they can do it by acting in a very disciplined manner, which can be seen on Level 2 and even better on level 3. The small retailer mostly gives up and sticks with the position or if frustrated is leaving the party, while the bigger ones simply follow the market down and with it their average. Of course, this kind of strategy is only employed if those doing it, see the value now and in the future.

Last but not least: The present capitalisation may be at discount versus the amount which was offered by J&J but refused by DECN. One does not have to be smart to understand, that this rejected offer will not run away on the contrary, the chances to get more out of it are rather substantial, otherwise – and this is my guess – some large shareholders would not have given signals to the management not to go for it.

And finally here a weekly chart which again shows, that there is certain kind of discipline and one get’s the feeling that some of the biggies are in perfect control of the pattern. Is it of any help short-ter? Certainly no. But I prefer to share the bed with some smarties and if they feel well being in the stock and even accumulate more, then I have no problem, not to stay with them.