Zi Corp (ZICA)

Company

"Zi Corporation has a singular focus: making customers' mobile devices smarter and easier to use. Zi makes "intelligent interfaces," meaning software that is embedded in mobile devices that simplify the data entry and interaction process. The result is richer, more personalized interaction for easy, quick and intuitive communications." (company website)

Buy

3-Feb-05. After breaking out near the end of December, Zi Corp has been consolidating ever since. It jumped again today on good volume, so I jumped on. Cash flow (CMF) has gradually become less negative. The slowdown in price momentum leveled off (PPO). And, ZICA has recovered from being oversold (StochRSI).

With any luck at all, ZICA will continue to rise to surpass the earlier peak.

14-Feb-05. With ZICA poised to move ahead of the previous peak, and with indicators looking strong, I decided to buy another lot of ZICA.

Unfortunately I bought in the flush of the morning's excitement and paid too much. If the stock retreats, I will have made a sow's ear from a silk purse.

Sell

3-Mar-05. As they say, "Act in haste, repent at leisure." ZICA consolidated for two weeks, well below my purchase price but still high enough that I would have broken even if I had just bailed out. But I was encouraged — falsely — by the big volume day the following week and the rising ADX. What I failed to appreciate was that it was the declining buying pressure (+DI) that was strengthening trend. Money stopped flowing into the stock (CMF). Also, the StochRSI kept falling, indicating ZICA was on its way to oversold.

Monday's sell-off was definitely a warning sign; on Tuesday the price broke below the 50-day moving average; today ZICA broke below the lower Bollinger band. Sometimes big sell-offs signal an impending reversal and are followed by a "bounce" off the broken support level. I'm not counting on it. I'm now the owner of an expensive sow's ear.