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

2-Jun-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.

After buying in too early, I bought a half-lot at a lower price when SWIR pulled back. It may have been premature. Although there is some weakening in my critical signs, SWIR has held on to most of the latest big jump.

Sell

8-Jun-05. SWIR took off like a rocket today on news that the company was dropping one of its projects. I guess The Street didn't like that project!

I debated about whether to sell my shares or hold a bit longer in hopes of further price jumps and the possibility to cover the losses I took on SWIR earlier. In the end I chose the bird in the hand. A near 20% price rise in a single day is just not sustainable. Even if it turns out to be a harbinger of better things to come, there is bound to be a period of consolidation at the new level — after all, nothing else about the company has changed, and they are going to have to take a charge against earnings for closing down the development team.