KEMET (KEM)

Company.

"KEMET Corporation is the world’s largest manufacturer of solid tantalum capacitors, the fourth largest manufacturer of multilayer ceramic capacitors, and a leader in the development of solid aluminum capacitors. The company’s strategy is to be the preferred capacitor supplier at each of the world’s most successful electronic companies." (company website)

Buy

14-Dec-04. KEMET bottomed in October and has been climbing back up since then. It had some nice gains on heavy volume at the beginning of the month but gave a lot back. Last Friday, KEM touched up with the 50-day moving average on an up-day and notched another gain yesterday. I decided to jump in today if it traded above yesterday's close.

There has been a nice up-tick in buying pressure (green +DI line), and the price oscillator (PPO) has leveled off. With a modest improvement in relative strength (RSI) and so much room to regain the year-ago prices, I expect KEM to rise nicely over the next month or so.

Sell

2-Feb-05. Hope springs eternal. I kept thinking that KEM would "rise nicely over the next month or so" and it didn't. I decided to sell today when the price dropped sharply after rising for several days. It seems clear that the downtrend will not to be broken. The 50-day moving average has been tested twice in the last month and both times KEM failed to break resistance.