Leadis Technology (LDIS)

Company

"Leadis Technology is a fabless semiconductor company based in Sunnyvale, California, with operations in South Korea, Taiwan and Hong Kong.

"Leadis designs, develops and markets mixed-signal semiconductors that enable and enhance the features and capabilities of small panel displays. Our core products are color display drivers with integrated controllers, which are critical components of displays used in mobile consumer electronics devices. The performance characteristics of a display driver are critical to the quality and visual appeal of the images and text generated on the display and the power efficiency of the mobile device. Our current focus is on the wireless handset market, where high performance display drivers allow handset manufacturers to provide value-added, differentiating display features to attract wireless service providers and consumers." (company website)

Buy

23-Jun-05. After touching up with the 200-day moving average, LDIS opened lower this morning but then moved up nicely after flirting with further declines, all in the context of an overall market pullback. I decided it was time to jump back in again, ironically at about the same price as I sold before.

• Price momentum (PPO) — has declined but stabilized again
• Trend (ADX) — slacking off, and buying pressure (+DI) is declining
• Money flow (CMF) — decline has stabilized
• Relative strength (RSI) — ticking back up again

6-Jul-05. The shares I bought on 23-Jun were up 12% and the LDIS chart still looks strong. LDIS broke above the previous peak yesterday. So, I added to my position today.

Sell

8-Aug-05. How quickly things change! When LDIS started to pull back after I bought the second lot I was unconcerned — the price was still above my average. Then LDIS reported earnings, or, more specifically, the lack of them. When the market heard that LDIS had swung to a loss, the price plunged. At first I hung tight, hoping there might be an over-reaction bounce. There was (1 day) but it was a sucker play. LDIS has continued down. With the signs opposite the way they should look (RSI declining, -DI and ADX up, CMF down) I decided to cut losses.