BearingPoint (BE)

Company

"BearingPoint, Inc. is one of the world's largest business consulting, systems integration and managed services firms serving Global 2000 companies, medium-sized businesses, government agencies and other organizations. We provide business and technology strategy, systems design, architecture, applications implementation, network infrastructure, systems integration and managed services. Our service offerings are designed to help our clients generate revenue, reduce costs and access the information necessary to operate their business on a timely basis. Based in McLean, Va., BearingPoint has been named by Fortune as one of America's Most Admired Companies in the computer and data services sector." (company website)

Buy

2-Mar-05. BearingPoint has been bouncing along between $7.50 and $8 since early December. This week it looks to be breaking out above $8.

Yesterday was a huge-volume up day. Price momentum (PPO) is increasing. Trend strength (ADX) met the 20 threshhold yesterday. The flow of money into the stock (CMF) has been increasing. Relative strength is on the rise (RSI). And, the 50-day moving average has just reversed from down to up, and trading is nearing the 200-day moving average.

The key thing to watch for will be the test of resistance at the 200-day moving average. The long-term trend (see sidebar) is still down, so BE will need close watching.

Sell

23-Feb-05. I breathed a huge sigh of relief last week when BE reversed its downward slide with three days of price increases on nice volume. But when it closed two days in a row just above $8.75 I began to worry that it was running out of steam, so I decided to sell if it seemed to be pulling back. Today BE opened slightly down but then continued to fall was my cue to sell.

I expect BE to pull back closer to the average and then resume climbing. On the other hand, there is a very straight line between the three peaks on the 1-yr chart (see sidebar). It will be interesting to see which way BE goes.