Maxtor (MXO)

Company

"Maxtor Corporation is one of the world's leading suppliers of hard disk drives and data storage solutions. The Company has an expansive line of storage products for desktop computers, storage systems, high-performance Intel-based servers, and consumer electronics. Maxtor has a reputation as a proven market leader, built by consistently providing high-quality products and service and support for its customers." (company website)

MXO stock chart

Buy

8-Jun-05. Maxtor bottomed in November after a sharp decline and has been moving generally upward since. After peaking at $6 in March, MXO pulled back and is just now testing the $6 level with some heavy volumes.

  • Price momentum (PPO) — was declining until four weeks ago when it suddenly turned positive and is gathering momentum
  • Trend (ADX) — finally showed definite strength in past three weeks after buying pressure (+DI) crossed above selling pressure
  • Money flow (CMF) — now strongly positive
  • Relative strength (RSI) — picking up strength for nearly six weeks now

17-Jun-05 MXO has been pulling back from the most recent peak, and yesterday appeared to be ready to start going back up again. Today it plunged dramatically in a move pundits attributed to concern over a price war. But then it began creeping steadily back up again, and I decided to double-down. With volume of nearly 7 million shares, I think the least courageous stakeholders have flown the coop. Lordy, I hope I'm right.

Sell

loss Bottom line
-23%

12-Oct-05. Lordy, lordy, I was wrong.

Earlier this week, MXO got a big jump from a very favorable mention in Barron's, who reported that MXO had turned the corner on solving its problems. I should have liquidated that day when MXO got above $4.50.

But— There were signs of incipient recovery, so I continued to hold the shares, but when MXO fell the next day again, I did set a stop-loss order to trigger if MXO fell below the 1-month average. Accordingly, my last shares sold this morning.

Ouch! I need to devise a better exit strategy for cases where I hold more than one lot of a stock.

MXO stock chart
MXO 1-year chart