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-Jul-05. LTXX is on an uptrend after bottoming in May (see sidebar). This is my third lot of LTXX (earlier lots were purchased on 16-Jun-05 and 21-Jun-05).

I bought today on a big dip after yesterday's jump up. The chart is still strong, and LTXX is still above the 200-day average, even after pulling back. The average price per share is now $5.65 for the shares I still hold, so there is a comfortable cushion above the breakeven point for these shares. Even if LTXX pulls back some more I would expect it to stop above that point.

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.