Mobility Electronics (MOBE)

Company. "Mobility Electronics, Inc. is a rapidly growing developer and marketer of a broad range of innovative products and solutions for mobile professionals." (company website) Their products include accessories for handheld and notebook computers, as well as mobile phones, marketed under various names like iGo, Magma, Portsmith, and Cutting Edge Software

Bottom line
5%

Buy. I had high hopes for Mobility Electronics. MOBE reached a 52-week low of $0.60 in Oct-2002 then got as $1.06 in November, before retreating back to $0.70 in January, 2003. From that point on, it has been climbing steadily.

In late July, MOBE broke the $6 barrier and the $7 barrier on the same day. A week later it broke through the $8 level. A consolidation was clearly in order, and over the next two weeks it pulled back as low as $5.55. Braver souls might have bought at that point, but I was hesitant because of the inauspicious clues found in the directional indicators (ADX falling, +DI falling, -DI rising). I would wait.

When MOBE got to $7, it stalled out again and fell back. I suspected it might form an ascending triangle, which it did (pink and bright green lines). On August 27, MOBE came bursting out of the triangle. When it pulled back again the following day, I bought.

Sell. After reaching a new high of $8.69, MOBE started to pull back, getting near $7 again, where it held. Although this was below my 8% threshhold (high to date minus 8%), I didn't sell at this point because a pullback seemed likely and probably warranted.

Level II quotes for MOBE Offers to buy are queued up on the left, offers to sell are queued up on the right. My stop-loss order, outlined in pink, was activated because the highest bid is below $7.65. The last actual trade had been at $7.69, and there were still 100 shares on offer at that price ahead of my order.

When the price jumped to nearly $8 again yesterday, I thought I was home free. My spirits were further bouyed when it opened still higher this morning. But from the open it was all downhill. I was nervous because the Nasdaq in general was in a spirited rally, and I was afraid MOBE might have met its "resistance" level at $8.00 and could just keep going down.

As it approached $7.70 , I took defensive action, placing a stop-loss order to sell at $7.70 if the bids dropped as low as $7.65. This was a new technique, for me, with my stop-loss orders. Because there's usually a gap between the highest bid and the lowest offer to sell, I decided to set my activation price ($7.65) lower than my limit ($7.70) to avoid premature triggering.

This proved to be a useful technique, although I think I could have improved it by making the spread between my limit and the activation price a bit more than 5¢. As it happened, just after my shares sold, buyers came in willing to pay more. If I had used 7¢, perhaps, my order would never have been triggered, and I'd still have my shares.

Nevertheless, I did still make a small profit on the shares, and it was a good test of a new (for me) technique. It's one I plan to use more often with volatile stocks.