Power-One

PWER

Company. "Power-One is one of the top power-conversion equipment manufacturers in the world and is ranked in the S&P 500. Customers include Internet and telecommunications service providers and equipment manufacturers." (company website)

Buy. Power-One surfaced in a scan for bullish breakouts with higher than normal volume. The trend was established when PWER broke through the 50-day moving average and the $7 level at the beginning of the month. Since then the 50-day average has turned around, and with the recent peak at $9, PWER is less than 25¢ away from the 200-day moving average. Looking at the 1-year chart (see sidebar), it seems clear that the downtrend that started early in 2004 has been reversed. There is a healthy flow of money into the stock, and the trend is strong (black ADX line).

Sell. PWER opened higher today than yesterday's close but then moved downward. My observation is that this is hardly ever a good sign. Although the chart is very strong, I decided to lock in the profits while I have them.

I expect that PWER will pull back closer to the 50-day moving average since it has been a month since it crossed over the average and then reversed the trend of the average.