Viisage (VISG)

Company

"Viisage delivers advanced technology identity solutions for governments, law enforcement agencies and businesses concerned with enhancing security, reducing identity theft, and protecting personal privacy. Viisage creates solutions using secure credential and face recognition biometric technologies that quickly, reliably, and accurately identify individuals in both one-to-one and one-to-many situations." (company website)

Buy

23-Dec-04. Viisage turned up several days ago on a screen for bullish breakouts with higher than normal volume. After getting as high as $9, VISG pulled back to just around $8 again. Yesterday it broke $9 again on good volume and continued upward again today.

The trend is strong (black ADX line), relative strength is rising (RSI), there's good momentum (PPO), and it is not yet over-bought (StochRSI). And fundamentally, this is a good stock for the age of paranoia.

27-Dec-04. 27-Dec-04 When I bought VISG last week, bidding was hot and only half my order was filled. This morning news broke that one of Viisage's big contracts had been nullified by the courts because of improprieties in the bidding process, and the price plummeted. That meant that the balance of my order was filled at a much lower price. The good news is that the average price is cut; the bad news is that the trend may be broken. Time will tell.

Sell

18-Jan-05. "Time will tell," I said. Time has told. I lost. Last week VISG danced around the 50-day moving average, not a bad sign in itself. The bad sign was when it opened lower today, rose a bit, then fell. VISG is now dangerously close to the 200-day moving average and the lower Bollinger band. It is also below the breakout point at the beginning of December.

In view of the multiple signs of weakness, I decided to sell today and take the loss: price momentum (PPO) is sharply negative; selling pressure (red -DI line) has crossed above buying pressure (green +DI line); relative strength is weakening steadily (RSI), and VISG is oversold (StochRSI). Average daily volumes are also declining.

In short, I see lots of reasons to believe that things will get worse before they get better. Bail-out time!