B/E Aerospace

BEAV

Company. "B/E Aerospace, Inc. is the world's leading manufacturer of cabin interior products for commercial passenger aircraft and business jets. The company also provides a wide range of cabin interior design, reconfiguration and certification services, including the conversion of passenger aircraft to freighter use." (company website)

Buy. BEAV turned up in my screen for stocks making both price and volume gains.

A torrent of money (CMF) has been flowing into BEAV since the beginning of July. On 22-July, BEAV announced financial results and reported earnings that exceeded expectations. MarketEdge says BEAV is a "buy."

There are two things about BEAV that concern me. (Is this remorse setting in already?)

• The trend is weakening (black ADX line) and BEAV may need to pull back more after the rapid gains following the earnings announcement. If that happens, I will have bought too soon at too-high a price.

• BEAV has skyrocketed this year (see sidebar) and at the recent high of $10 is up more than 250% for the year. My purchase price is 25% above the 50-day moving average.

Besides those technical considerations, it maybe wasn't too smart to get into a company dependent on the airline industry when the prospect of additional bankruptcies fills the headlines. On the other hand, if more airlines go bankrupt, that means there may be a lot of airplanes changing hands, which means work for B/E's reconfiguration business....

Sell. When BEAV got up over $11.00 I decided to protect my profits by setting a trigger to sell if it traded below $11. It did, the order executed.

BEAV still looks pretty strong, in many ways, but it has had a nice short-term up trend and is getting quite a bit ahead of the moving averages. Yesterday's session with the open and close so close together signaled indecision in the market, and when it opened higher today and then traded lower for the rest of the session, that pretty much confirmed that BEAV is due for another pullback.

If you look at the 1-year chart (see sidebar), BEAV has had an astonishing rise since mid-July. The trend may very well continue, but a pullback to the moving averages would not be surprising. If it does pull back, I can always jump back in again if it still looks promising.