Cable & Wireless PLC (CWP)

Company. Cable & Wireless is "a leading international telecommunications company, with customers in 80 countries" providing IP, voice, and data services to business and residential customers. (company website)

Buy. I bought CWP after it had made a nice jump to the $8 level, pulled back, and then recovered to above $8 again. Volumes were respectable on the up-days, buying pressure was increasing (rising green +DI line), and the trend had begun to strengthen (rising ADX line).

For the next week, this looked like a terrific buy. The price continued to rise, reaching a new high of $8.80. Unfortunately, three successive down-days followed, the third making a big gap down and closing below my purchase price.

Sell. I grew nervous about CWP when I saw that selling pressure (red -DI line) surged over buying pressure (green +DI line), and trend strength continued to weaken (falling ADX line). The large number of gaps associated with recent price moves increased my concern. Volatility can be your friend — or your downfall.

Rather than take a chance on further deterioration, I decided today to sell and apply the money left after taking the loss to additional shares of another stock in my portfolio that is starting to move upward.

Ides of February. February has not been a good month in the market. The Nasdaq has given back nearly all the gains it made in January. This trade is an attempt to put bucks where they'll be more likely produce a bang.