Phoenix Technologies (PTEC)

Company

"Phoenix Technologies develops a complete product suite of Core System Software, tools and applications to deliver trusted, seamless computing to digital devices for an Internet-connected world. Phoenix Technologies helped launch the PC industry nearly 25 years ago. Today the company is extending its leadership and knowledge at the core of machines, beyond the PC to a wide range of platforms and devices.

Phoenix Core System Software has set the standard for the world's leading branded PC OEMs and their global network of supply chain and software partners. Today, Phoenix solutions enable, secure, connect, and recover the world's best-known systems. These solutions are built into the device core, where they are protected from viruses, user errors, hackers, and corruption. Phoenix is headquartered in Milpitas, Calif. (Silicon Valley), with offices in global business and technology centers. (company website)

Buy

2-Mar-05. Phoenix Technologies has popped onto the radar screen several times since November when it passed the previous peak. Like almost everything else, it took a hit in January, but recovered and spent most of February consolidating just under $10 (see sidebar).

The big question is whether PTEC will push up some more or pull back again. The signals are mixed: Price momentum (PPO) has fallen off to neutral. On the other hand, trend strength (ADX) is increasing, money is still flowing strongly (CMF) into the stock, and relative strength (RSI) is creeping upward. On the other hand, the more-sensitive Stochastic RSI has is trending generally downward.

7-Apr-05. PTEC has been pulling back from a new 52-week high, causing me nervous palpitations. But yesterday and today it moved up with decent volume. This has caused relative strength to turn stronger (RSI) and for the stock to no longer be oversold (StochRSI). I bought another lot on the prospect of further advances, and to lower my average share price. Yes, I know, a person shouldn't do that.

Sell

28-Apr-05. "Yes, I know, a person shouldn't do that." And why didn't I listen to myself?

For a couple of days after I bought my second lot, it looked like I had made a good call. Yesterday, however, PTEC opened higher and then fell back below the previous day's close, which I am coming to understand as a bad omen. After the market closed yesterday, PTEC released its earnings, and the reaction this morning was immediate and harsh. The price dropped all the way back to the 200-day moving average before recovering slightly, but I decided that there was now little hope of recouping my investment in the near term. PTEC is now below the December peak.

I'm going to eat the loss, but it is giving me a severe case of indigestion.