LSI Logic (LSI)

Company. LSI Logic is "a leading designer and manufacturer of communications, consumer and storage semiconductors for applications that access, interconnect and store data, voice and video. In addition, the company supplies storage network solutions for the enterprise." (company website)

Buy. LSI was picked out by the stock scan when the ADX line crossed the 20 threshhold. After a few days, the price pulled back, and I bought.

After LSI reached a new high of $8.08 later in June, it fell dramatically back to $6.50 but recovered the same day to close near $7.00 again. Whew!

After reaching another new high in mid-July, the price fell back again.

Sell. After the market closed on Tuesday, LSI reported a quarterly loss of 0.02, compared to Expectations for a loss of 0.08. On Wednesday, the market responded by a day of nice gain, followed by a high-volume breakout on Thursday. But instead of breaking out at the open and continuing to advance higher, LSI broke out and then retreated. During the day, the price was all over the place, at times even falling back below the previous day's low.

On Friday, today, LSI opened about where it had closed the day before, but couldn't "decide" whether to go up or down, so it went both ways before ending up in almost the same place. All this indecision, in the context of an up day in general, made me decide to sell.

On the one hand, this could turn out to be a premature sale. Both ADX and Chaikin oscillator indicators are strong and pointing in the right direction. It could be that LSI is just going to "rest" after such a big jump. A positive interpretation of the long tail on Thursday's candle would be that the market had "tried" to go lower and failed.

On the other hand, the long tail on yesterday's candle and today's indecisive session could be a sign that investors just aren't sure that LSI stock is really worth $9 per share, making it likely that the price will retreat some more.

In this case, I chose to see the glass as half-empty.