Enersis SA (ENI)

Company. Enersis is an electric power company operating in several countries in Latin America as Grupo Enersis. It is part of a Spanish energy company, Endesa. (company website)

Buy. Enersis was a good idea at the time. In late September, ENI began to rise on indications of considerable trend strength (ADX line) and prospects for future rises (rising Chaikin oscillator). I bought ENI in October when it broke through the $6 level on much higher than average daily volume. It soon neared $7, and it looked like a winner.

Later in October, however, ENI became quite volatile, and in November ENI dropped back down to the $6 level.

Much of ENI's business is in Argentina, where the government peso-ized the company's debts and then imposed strict price controls, putting a squeeze on profits.

Sell. When ENI price fell below $6 I began to look for an opportunity to get out. There were just too many complications with price controls and multiple levels of company ownership. When ENI appeared to reverse direction on 11-Nov, I put a trailing stop on my shares at 5%. If the price continued to rise while I was gone, so much the better; the stop would move up with the highest trade. (ENI trades on the NYSE, so stops are triggered by last transaction price, rather than bid price on the Nasdaq.)

On Friday, 17-Nov-03, ENI got as high as $6.92. Thus, my sell order would activate at $6.57, and the share sold at $6.54.