Vascular solutions (VASC)

Company. Vascular Solutions is a medical device company specializing in products for cardiologists and radiologists. (company website)

Buy. I bought Vascular Solutions just last week. It made a nice jump from $11 to $12; I bought the following day while it caught its breath.

VASC began testing the $9 level in February but just couldn't get past it. Discouraged, I suppose, it fell back. Then in late March, the company announced that it had received FDA approval for a new product, and the stock shot up $4 from $6.60 before settling back to close just under $10. It continued to climb, albeit a bit uncertainly. Then in mid-April, VASC reported earnings, which included a dramatic reduction in loss, a huge growth in sales, and rosy guidance for the rest of the year.

The upward march continued. I finally succumbed to temptation at the $12 level. Although VASC had turned up in my screens some time earlier, I chose to ignore it because of the great volatility and unpredictability of stocks in the medical sector. Nevertheless, the strength of the upward trend just kept on climbing (ADX line) and buying pressure (green +DI line) was rising again as well.

Sell. Although VASC set another new high yesterday and was up again this morning, I decided to sell, even though the indicators are still strong: declining selling pressure (red -DI line), strengthening trend (ADX line), increasing money flowing into the stock (CMF), rising 50- and 200-day moving averages.

• A gain of more than $2 per share "ain't half bad" as my momma used to say.

• At $14, VASC has climbed 200% in less than a month; it is 155% above the 50-day moving average.

In short, it has come very far, very fast, and that is not likely to last. Conventional wisdom would say that I should have set a stop-order on the stock to sell if the price dropped X amount or percent. But, I have gotten burned in the past when the market is volatile. If the price drops too fast the stop order might not execute if I have set a limit, or it might execute at a very low price if I make it a market stop order. Better to go for the sure deal.