Lexar (LEXR)

Company

"Lexar is a leading manufacturer and marketer of award-winning removable flash memory cards, USB flash drives, card readers and ATA controller technology solutions for the digital photography, consumer electronics, industrial and communications markets. Lexar brands digital memory cards in the industry's most popular formats including CompactFlash, Memory Stick, Memory Stick Pro, MultiMediaCard, SD, Mini-SD, SmartMedia, and xD-Picture Card. Lexar's ATA controller solutions for industrial and OEM applications and its innovative intellectual property is licensed by some of the world's most respected companies. As a digital storage innovator, Lexar was the first to develop and advance proprietary read-write speed standards for its CompactFlash cards, and holds over 70 controller patents." (company website)

Buy

8-Jun-05. Lexar declined sharply from October to March when the downtrend reversed. Since the end of March, LEXR has been consolidating around $5. LEXR broke out yesterday with much heavier volume.

• Price momentum (PPO) — pretty flat until this week
• Trend (ADX) — strengthened this week as buying pressure (+DI) became dominant
• Money flow (CMF) — becoming less negative, about to turn positive
• Relative strength (RSI) — so-so until this week when strength picked up

Sell

21-Jun-05. Yesterday, almost a half-million shares of LEXR changed hands in the last 20 minutes of the session, involving wild swings from $6.11 down to $5.72 and back up to close at $6.04. Sound the alarms!

This morning started with the see-saw action again, and after 30 minutes I decided to protect myself by selling if LEXR drifted much lower. It did, and my order was triggered at $5.95. Later in the session LEXR stabilized at about $5.80 and has since moved back up a bit. Nevertheless, I'm glad I took my money off the table.

I will, of course, be chagrined if this turns out to have been the worst of it, and LEXR goes on to soar. While that's a possibility, I think that with two down days, it's a distinct possibility that it will pull back closer to the 50-day moving average or at least to the 1-month moving average. If it then takes off again, I can have an even more advantageous basis.