Spectranetics (SPNC)

Company

"Spectranetics develops, manufactures and markets the 'cool' ultraviolet excimer laser technology for multiple cardiovascular procedures to physicians and hospitals worldwide. This leading-edge technology safely and effectively removes arterial blockages and ablates the scar tissue holding problematic pacemaker and ICD cardiac leads in place." (company website)

Buy

18-Jan-05. Spectranetics broke out above $5 at the beginning of December with big price rises on heavy volume. Since then it has been consolidating just above $5.25. After touching up with the 50-day average last week, it broke out today with another heavy-volume session.

Signs are promising: the oversold condition (StochRSI) has been remedied; price momentum (PPO) has turned up; money flow (CMF) has improved dramatically; and buying pressure (green +DI line) looks to have turned upward sharply.

Sell

4-Feb-05. I began to get nervous about SPNC when it opened higher last Thursday but continued to fall. I placed a stop-loss order, which executed on Friday when the price eroded further.

In many respects, SPNC still shows a strong chart, and it is poised to make a new one-year high (see sidebar). By the same token, it has come a long way since the reversal at the end of November, and consolidation or pullback would not be unlikely. "A bird in the hand...."