MIPS Technologies

MIPS

Company. "MIPS Technologies is a leading provider of industry-standard processor architectures and cores for digital consumer and business applications. We design and license the industry's highest performance 32- and 64-bit architectures and cores, which also offer some of the smallest silicon footprints and lowest power consumption of any embedded microprocessors." (company website)

Buy. MIPS turned up in a screen for bullish breakouts with big volume. The stock bottomed in early August and broke above $6 two weeks ago. Last week it broke $7 after two previous attempts failed. On another big volume day last Friday MIPS broke $8.

I'm a little late to the MIPS game. It has been climbing the upper Bollinger band for over a week, and it will doubtless pull back from such steep climbs. But, the trend is so strong (black ADX line) and the money has been flowing so strongly into the stock (CMF) I will bet that the pullback will be only temporary.

Sell. Yesterday, MIPS formed a bearish engulfing candle, having opened above the previous day's close and then fallen below the previous day's range. This usually seems to be a bad omen, and when I saw today's prices trading just above $9, I put in a stop-loss order to sell if the price dropped below $9. It did, the order executed.

MIPS actually held its ground today, but on very light volume. It has been a month since any noticeable correction (see sidebar), so a pullback closer to the 50-day moving average would be reasonable. If that happens, I can buy again. This was my third lot of MIPS this year.