Aspen Technology (AZPN)

Company

"Aspen Technology, Inc. provides industry-leading software and professional services that help process companies improve efficiency and profitability by enabling them to model, manage and control their operations. The new generation of integrated aspenONE™ solutions are aligned with the key industry business processes, providing manufacturers the capabilities they need to optimize operational performance, make real-time decisions and synchronize the plant and supply chain. Over 1,500 leading companies already rely on AspenTech's software, including Bayer, BASF, BP, ChevronTexaco, DuPont, ExxonMobil, Fluor, GlaxoSmithKline, Sanofi-Aventis, Shell, and Total." (company website)

Buy

11-Oct-05. Aspen reversed a long downtrend in May (see sidebar) and has been moving strongly upward ever since.

• Price momentum (PPO) — strong momentum since breaking up from $5 level
• Trend (ADX) — very strong, and buying pressure (+DI) has turned up again
• Money flow (CMF) — still strong, although moderating
• Relative strength (RSI) — strong
• Volume — average daily volumes have been increasing slightly

My one concern is that the uptrend has been in place so long and steep that a correction may be in order.

Sell

4-Nov-05. Aspen has been bumping along in nowheresville since I bought my second lot. Earnings are due to be reported next week, and clearly the market is uneasy. That makes me uneasy, so I decided to bail out on this first lot to reduce my exposure in advance of earnings.