Carreker (CANI)

Company

"Carreker Corporation improves earnings for financial institutions around the world. The Company's integrated consulting and software solutions are designed to increase clients' revenues and reduce their expenses, while improving security and increasing the value of their customer relationships. Carreker provides products and services to more than 250 clients in the United States, Canada, the United Kingdom, Ireland, continental Europe, Australia, New Zealand, South Africa, South America, Mexico, and the Caribbean. Clients include the full range of community, regional and large banks, among them more than 75 of the largest 100 banks in the United States." (company website)

Buy

6-Jun-05. Carreker has been trending down for most of the past twelve months. It appears that a bottom was reached in April, and the downtrend has been reversed (see sidebar).

• Price momentum (PPO) — steadily gaining momentum for almost two months
• Trend (ADX) — trend being established for past two weeks when buying pressure (+DI) increased sharply
• Money flow (CMF) — generally increasing, but weakened for last two days
• Relative strength (RSI) — increasing steadily for nearly two months

17-Jun-05. Carreker has been pulling back from the latest peak, reaching a new low yesterday since I bought. But today CANI jumped up to open and continued to rise on about three times normal volume. I doubled-down, and today's close puts me at break-even on CANI. Buying pressure (+DI), money flow (CMF), and relative strength (RSI) are all turning up.

Sell

14-Oct-05. This is a case of turning a silk purse into a sow's ear. For the past week, CANI has been deteriorating markedly, and I put in place a stop-loss order to sell if CANI closed below $6.50. When the market closed yesterday, CANI was at 6.58 and my three lots of CANI were showing returns of 20%, 25%, and -4%, respectively, and I decided that I would watch it closely when the market opened today.

CANI opened today at $6.60, and I breathed a small sigh of relief. On very slim volumes, CANI suddenly began to fall. When it passed below $6.50 I put in a sell order at $6.45 to lock in very respectable profits. Alas, only 200 shares sold at that price, and as bad went to worse I was forced to liquidate the remaining shares at market, dropping my overall return on the three lots down to just 5.6%.