LTX Corp (LTXX)

Company

"LTX designs, manufactures, markets and services semiconductor test equipment. We sell our test systems worldwide to designers and manufacturers of semiconductor devices, such as Texas Instruments, STMicroelectronics, Samsung, Philips Semiconductor, Motorola, Lucent Technologies, Infineon Technologies and Hitachi. These devices are incorporated in a wide range of products, including data communications equipment such as switches, routers and servers, broadband access products such as cable modems and Ethernet accessories, personal communication devices such as cell phones and personal digital assistants, consumer products such as televisions, videogame systems, digital cameras, and automobile electronics, and personal computer accessory products such as disk drives and 3D graphics accelerators." (company website)

Buy

21-Jun-05. LTXX is recovering from a steep downtrend for most of the past twelve months. The downtrend ended in mid-May with a big jump on four times normal volume. After LTXX broke $5, it jumped up again and consolidated around $5.25, at which time I took an initial position.

I added to my previous position today. LTXX spent most of yesterday bouncing up and down from the $5.05 level like some kid on a trampoline. Bouncing around in a very narrow range seems to be a precursor to movement, one way or the other, so I decided that if it moved higher today I would increase my position. After it stabilized again at $5.15, I doubled down, which brings my average price per share up to $5.20 which, happily, is about where LTXX seems to be resting, with less than an hour remaining in the session.

Sell

5-Oct-05. I should've quit while I was ahead! When LTXX continued to rise after I bought my first lot, I bought another. That, however was the beginning, of the end. It climbed a bit, pulled back a bit, and then was slammed after the release of earnings on 25-Aug. I held on, thinking I might be able to take advantage of an over-reaction, but it only got worse.

While price momentum (PPO) is picking up, there is other ominous weakness in the chart, namely the decline in relative strength (RSI). To guard against further losses if LTXX ratcheted downward again, I put in a stop-loss order to trigger if LTXX traded at $4.20 or less. That order was triggerred in today's sour market.