TechTeam Global

TEAM

Company. "TechTeam Global, Inc., is a global provider of comprehensive knowledge based support solutions that enable Fortune 1000 companies to improve operating efficiencies, productivity, and profitability. The Company's ability to integrate computer services into a flexible, total Single Point of Contact solution is a key element of its success." (company website)

Buy. TechTeam first came to my attention several months ago when it started making new highs for the year. It then pulled back until the beginning of June when it recovered the lost ground and continued higher. Truth is, I should have bought then.

But like the Siren that keeps luring sailors to the rocks, TEAM popped up in my screens at the end of July with advances on huge volume. It is already up more than 50% for the year, but I decided to buy some shares anyway.

• The trend has started to strengthen again (black ADX line in rising)
• On July 29, TEAM reported earnings of 11¢ per share, compared to a loss of 14¢ a year ago
• Yesterday the stock held onto the gains from the previous day, although it had to beat back the bears to do so (long lower shadow on the candlestick)

I'm probably going to regret this buy at this time. At $10.75, TEAM is 18% ahead of the 50-day moving average, and a pull-back or consolidation would not be a big surprise. On the other hand, the averages (50-day and 200-day) has been moving up steadily, and TEAM appears to have some momentum going for it. Time will tell.

Sell. Truer words were never spoken (see previous paragraph). I have indeed come to regret this buy.

I put in a sell order this morning when I saw that TEAM had opened down again for the 4th day in a row — like what took so long? It broke through the 50-day moving average, with a bump in volume. In more "normal" circumstances, one would expect a "bounce" up from the 50-day average. These are decidedly not normal circumstances; I can't take the chance.

There is just so much I don't understand about this trade.

• Why did the price rise so much (from $8.56 to $10.89, mid-July to early August) when the buying pressure (green +DI line) was falling?
• Why is money flow (CMF) so strong, albeit weakening, for a stock whose price is falling?
• Were the four days of rising prices a sign of exhaustion?
• And most importantly, Why did I buy this turkey?

I know why I paid so much. This is a stock I tried to buy the previous day, but kept getting outbid. So, on the second day, I ended up chasing the bid up, and up, and up— At the end of the day that I bought I knew I had paid too much, but by then it was too late.

The good news is that I bought only half my normal number of shares, so this loss is much bigger in percentage than in dollar terms.