Echelon Corp

ELON

Company. "Echelon is the leading supplier of infrastructure hardware and software to the rapidly growing device networking market.... Echelon device networking technology enables end-users to remotely connect, monitor, control, and diagnose intelligent devices." These would be things like elevators and such. (company website)

Buy. ELON first showed up in my screens in November when the ADX trend line passed the threshhold of 20. Then last week it broke out of a sidewise channel with three days of impressive gains on increasing volumes. I put in an order to buy at market if ELON traded above Friday's close.

This was a mistake. Friday was such a big jump that I would have been smarter to anticipate a pull-back or profit-taking today when I would be able to pick up the stock for a much lower price. By buying at market, I overpaid in the volatile first hour of trading. What I think is good news is that although ELON closed lower today, it did not give back even half of Friday's gains. There's still a long way to go to even match the price 12 months ago, so I think — OK, hope — this will work out, but I may have to tolerate some more sidewise movement for a while.

Sell. Elon broke below the 200-day moving average and came very close to breaking the 50-day moving average last week as well. I had thought that after last Thursday's nice rally, it might keep going up today. But that didn't happen. ELON remains over-sold (StochRSI) with little sign of that soon getting any better. The trend is weakening (falling black ADX line) and relative strength is flat (RSI). I put in a sell order which took most of the day to execute.