Siebel Systems (SEBL)

Company

"Siebel Systems is the world's leading provider of solutions that help organizations of all sizes optimize their people, processes, and technology around their customers, leading to outstanding customer experiences and superior business results. Our customer relationship management, business intelligence, and customer data integration solutions are the product of more than $2 billion in direct and partner investment and reflect over 11 years of experience with more than 4,000 organizations." (company website)

Sell short

10-Jun-05. The 12-month trend for Siebel is clearly down (see sidebar). The moving averages are pointing down again.

• Price momentum (PPO) — quickly losing momentum
• Trend (ADX) — weakening over past weeks, and selling pressure (-DI) has just crossed above buying pressure (+DI)
• Money flow (CMF) — quickly falling off and now negative
• Relative strength (RSI) — gradually weakening

Buy to Cover

9-Sep-05. I really screwed this up. I've been nervous about Siebel for quite some time — although I was confident in the downtrend, SEBL is very heavily traded and, as a big company, SEBL can make news practically at will. Around mid-August, SEBL's fortunes began to turn, fueled lately by dismissal of an SEC case against SEBL and takeover rumors. The simple fact is that I dilly-dallied and missed an obvious reversal on August 16 and an even more obvious signal on September 8 when SEBL closed above the upper Bollinger Band. Consequently I had to cover at a loss, albeit a relatively small one.

12-Sep-05. Whew! And not a moment too soon. Today Oracle announced that it will acquire Siebel for the equivalent of $10.66 per share. Could have been very painful, indeed!