IPIX - An Example of Speculative Craziness

The price chart for IPIX corporation (IPIX), a supplier of a 360 degree video surveillance technology that can be used for government and commercial security applications, shows how a hot stock can soar, crash and then try to recover.

From late March through mid April IPIX shot up from $2 to $27 as investors bid up the 5,000,000 outstanding IPIX shares. But by the end of May the stock collapsed to $5. Then news of a successful test of its new video surveillance technology sent the stock up to $15 in June. The trading was on very heavy volume as investors furiously bought and sold IPEX shares.

The CTM percent returns chart shows the spectacular upside gains. The red area on the front right of the chart are the losing trades resulting from buying just before and after the $25 peak.

IPIX is reminiscent of Taser International (TASR), another homeland security play, that was bid up to unsustainable prices. At what price will IPEX trade at in the near future? It's difficult to know. But its recent price pattern tells us to be leery of this very speculative stock.