Avanex Corp (AVNX)

Company. Avanex provides "a broad range of integrated photonic subsystems, integrated optical modules and passive optical components to improve the speed and capacity of fiber optic transmission networks." (company website)

Buy. I bought Avanex in early January after the stock broke out of a clear and prolonged downtrend. Volume and price both picked up at the end of 2003, and I bought after AVNX broke $5 and the ADX line moved above 20.

Because AVNX had risen so far so fast, I expected that it would pull back at some not-too-distant point. I didn't expect it to be quite so soon.

Sell. Avanex had another big up-day on heavy volume last week, then reached a new high the following day. But it made the new high on a day of indecision, ending up about where it opened, but trading much higher and much lower during the session.

Yesterday's session was another warning: AVNX stock opened up, but then drifted lower and ended the day just below $6. When it continued lower today, I decided to sell. My guess is that AVNX will pull back some more and probably drop below my buy price. Thus, it is better to take a small profit now and buy back in later, if still warranted, than to ride the stock down, a trip with no guaranteed destination.