ASE Test (ASTSF)

Company

"ASE Test is one of the largest independent semiconductor testing companies worldwide and provides a complete range of testing services, including front-end engineering testing, pre-production burn-in testing, wafer probing; final testing of logic, mixed signal, and memory semiconductors, and other test-related services." (company website)

Buy

14-Dec-04. At the beginning of December ASE Test broke past the $6.50 level with a series of big jumps on higher-than-normal volume. It then pulled back almost to the starting point, making ASTSF over-sold (StochRSI). It appeared to recover last Friday, bouncing off the 1-month average (dashed green line). Yesterday was a low-volume day without much price movement. I decided to buy today if it traded above the close.

ASTSF has come close to touching up the 50-day moving average, and the 200-day average has leveled off. With so much headroom under the price a year ago, I think ASTSF may have some legs.

Sell

2-Feb-05. I screwed this one up really badly. For three weeks after I bought it, ASTSF tested the 200-day moving average (green line) and failed to break it. That was unmistakable sign #1.

Then, In January, ASTSF broke through the lower Bollinger band with big volume. That was unmistakable sign #2. And ever since then, cash flow (CMF) has been unrelentingly negative. That was unmistakable sign #3.

Moral of the story: Unmistakable signs can be mistaken when hope springs eternal.