Gerber Scientific (GRB)

Company

"Gerber Scientific is the leader in providing innovative, end-to-end customer solutions to the world's sign making and specialty graphics, apparel and flexible materials, and ophthalmic lens processing industries. Our software, computerized manufacturing systems, supplies, and service are fully integrated for maximum customer support and flexibility." (company website)

Buy

18-Oct-05. Gerber has been struggling for the past year to get over the $8 level (see sidebar). It now looks like it has a good chance of doing so. The moving averages have turned up and there are good omens in the chart.

• Price momentum (PPO) — gathering momentum for three months
• Trend (ADX) — strong, and buying pressure (+DI) has moved above selling pressure (-DI) after touching up last week
• Money flow (CMF) — has gone from strongly negative to strongly positive
• Relative strength (RSI) — increased over three months
• Volume — moved above $8 on strong volumes

Sell

25-Oct-05. For no apparent reasons, GRB gapped down to open this morning, and then continued to fall. That is seldom a good sign. It's often a good sign when a bottoming stock gaps down to open and then rises, but not when a rising stock gaps down to open and then falls.

GRB has been trying all week to get past $8.25. It looks like "it" is crying 'uncle' this morning. True, it didn't collapse below the lower Bollinger band, and it could just be backing up for a running start at a new attempt, but I think I'll not hang around to test that theory out. There are just too many troubling signs in the chart (see dashed pink lines).