Corillian (CORI)

Company. Corillian "is the market-leading provider of online banking solutions." (company website)

For HP-related readers, Corillian powers the online banking for Addison Avenue, nee HP credit union.

Buy. Corillian shares jumped from $4.50 to $5 and then continued on to a new high over $6.50 in the space of three days, all on heavy volume. The ADX line was rising smartly, indicating a strengthening trend.

In hindsight, and with greater knowledge of chart reading, I now see that I ignored four vital clues:

• A 45% jump in three days is just too far, too fast
• The rise was accomplished with a big gap followed by a day of indecision, also known as a long-legged Doji
• The +DI line, buying pressure, was actually falling
• The Chaikin oscillator was falling

When CORI pulled back and then rose to $7.45, I assumed, falsely that happier days were ahead. Instead, the price fell all the way back to $5. But instead of being chastened by this, I was encouraged by the fact that the price did not fall below the gap that began the seduction. When CORI rose above $6 again on heavy volume, I breathed a sigh of relief and bought some more. Again my hopes were dashed, and again I was reassured when the price stopped falling at the $5 level.

By the end of December, CORI had pulled back up to $6. Perhaps it would be OK...

Sell. Simply put, the rising tide was not lifting this boat.

Yesterday, when new highs were being set in the market, CORI was one of only two stocks in my portfolio to fall in price.

Although the loss on CORI is well within my tolerance limit, three other observations led me to sell. First, the 50-day moving average is falling; that's the wrong direction. Second, the average daily volume is very small. Third, the +DI line (buying pressure) and -DI line (selling pressure) are going in the wrong directions.

Accordingly, I sold CORI at a small loss and used the proceeds to buy more shares of two other stocks in my portfolio that are performing strongly.