eFunds (EFDS)

Company. eFunds provides "integrated information, payment, and technology solutions ... [for] financial institutions, financial services companies, electronic funds networks, retailers, government agencies, eCommerce providers and other businesses around the world." (eFunds website) Translation: ATM networks, electronic funds transfers between banks, etc.

Buy. For once I think I did this right. EFDS hit bottom 27 February and continued up for the next month, eventually reaching a high of $7.50 on 27 March. It then settled down to trade in one of those more-or-less symmetrical triangles for the next two weeks, breaking out decisively on 15 April (income tax day!) on higher than average volume. The ADX indicator and Chaikin oscillator crossed their threshholds (20 and 0, respectively) at the same time. Three strong signals.

EFDS took a breather in mid-May then climbed to $11.00 by mid-June.

Sell. I should have sold on 16 June when EFDS surged $2 all the way up to $13. Unfortunately, greed clouded my judgment with visions of doubling my investment. I failed to pay attention to the steady decline of the ADX line and the Chaikin oscillator. The stock gave up most of the surge over the next week. I rationalized not selling by saying that it was still above $11, a price at which I had been extremely happy shortly before.

I sold half my stake today on a general rally amid a preponderance of good news earnings reports and ("they say") excitement over the killing of Saddam's sons. (Personally, I think that's really stretching cause-and-effect.)

So why didn't I sell the whole stake? Hope springs eternal. I think EFDS is trading in another month-long triangle. The two lows have been successively higher ($10.99 then $11.24). The +DI line is still above the -DI line, if just barely. And, the Chaikin oscillator has kissed the zero line and turned back up. The financial sector is doing well.

On the other hand, I'm going to have to take losses on some other stocks, and the proceeds of this sale will offset those.