Sierra Wireless (SWIR)

Company

"Sierra Wireless is a leader in delivering highly differentiated wireless solutions that enable our customers to improve their productivity and lifestyle. Sierra Wireless develops and markets the AirCard, the industry-leading wireless PC card line for portable computers; embedded modules for OEM wireless applications; the MP line of rugged vehicle-mounted connectivity solutions; and Voq Professional Phone, a line of mobile phones with easy-to-use, secure software solutions for mobile professionals." (company website)

Buy

25-May-05. Sierra Wireless is trying to reverse a long downtrend (see sidebar). Since it bottomed at the beginning of May, it has climbed steadily and broke through both the 50-day moving average and the upper Bollinger band. When it consolidated around $8, I put in a buy order to be triggered if SWIR traded at $8.10 or higher. Unfortunately, once it began to move, I was quickly outbid and I finally upped my bid to $9.

I wish I could have gotten in at a lower price, but the signs are strong:

• Price momentum (PPO) — climbing sharply
• Trend (ADX) — buying pressure (+DI) crossed above selling pressure (-DI) and trend has begun to strengthen
• Money flow (CMF) — has gone from slightly negative to strongly positive
• Relative strength (RSI) — rising steadily

The last two days' moves have been on heavy volume, but I am going to have to watch SWIR closely lest it suddenly pulled back as quickly as it spurted up.

Sell

6-Jun-05. I decided to bail out of SWIR this morning when it broke through the 50-day moving average. It is now at the price before the latest move up. If it breaks below $8 there is no clear stopping point for some distance down. Indicators that previously showed strength are now pointing in the opposite direction.